U.S. Treasury Department Once Again Refuses To Cite China For Currency Manipulation

On November 7, the U.S. Department of the Treasury delivered its semiannual “Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States.” The twice-yearly report, available here, reviews and assesses the policies — including exchange rate policies — of several major U.S. trading partners that, together, comprise about 78 percent of U.S. foreign trade in goods and services.

The report concluded “no major U.S. trading partner manipulated the rate of exchange between its currency and the U.S. dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade during the four quarters through June 2023.”

Here are the other major takeaways from the report:

• China was, once again, not accused of currency manipulation, but the country does remain on the Treasury Department’s monitoring list due to lack of transparency around its exchange rate policy and because of its large trade surplus with the United States. The report reiterated the Biden administration’s call for increased transparency from China.
• The Treasury Department found no major trading partner met all three criteria for enhanced analysis under the Trade Facilitation and Trade Enforcement Act of 2015 during the four quarters ending June 2023.
• Vietnam was added back to the monitoring list after its current account surplus exceeded the Treasury Department’s threshold.
• Switzerland and South Korea were removed from monitoring list while Germany, Malaysia, Singapore, and Taiwan remained on it.

In related news: The U.S. Department of Commerce has initiated an anti-dumping investigation into aluminum extrusions imported from 15 countries and territories, including China and Vietnam. Read the Federal Register announcement here.