December 21, 2020

China Not Listed As Currency Manipulator In U.S. Report, But Vietnam, Switzerland Are

The U.S. Department of the Treasury issued its semi-annual report on foreign exchange policies to Congress on December 16. While the Trump administration chose not to label China as a currency manipulator, it did accuse Vietnam and Switzerland of the practice.

As the newspaper The Diplomat explains, the designation requires the two countries to enter into negotiations with the U.S. government and the International Monetary Fund to address foreign exchange practices. U.S. Treasury Secretary Steve Mnuchin said, “Treasury will follow up on its findings with respect to Vietnam and Switzerland to work toward eliminating practices that create unfair advantages for foreign competitors.”

According to United Press International, Vietnamese officials pushed back against the designation. Officials from its central bank said, “We will maintain a financial policy that controls inflation while stabilizing the economy and flexibly managing exchange rates. Vietnam places great emphasis on stable and sustainable trade relations with the United States.” Swiss policymakers also rejected the designation and implied that their country would not change its practices.

China, along with Germany, India, Italy, Japan, Korea, Malaysia, Singapore, Taiwan, and Thailand, were all on the Treasury Department’s “monitoring list” of countries that merit close attention to their currency practices. The department called on China to adopt various policies, such as supporting domestic consumption, strengthening social safety nets, and increasing transparency about its foreign exchange practices.