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October 24, 2016

U.S. Treasury Department Refuses To Name China As A Currency Manipulator

On Friday, Oct. 14, the U.S. Treasury Department released its semi-annual currency report to Congress and, once again, the Obama administration declined to call out the Chinese government for its policy to manipulate its currency. (No administration since 1994 has taken this action.) In fact, according to The Wall Street Journal, “The U.S. Treasury Department sharply toned down its criticism of China and other Asian export giants” in the latest report. 

Sen. Rob Portman (R-OH) strongly criticized the decision. He argued, “By refusing to take on China over how it manipulates its currency, the Obama administration is giving Chinese workers an unfair advantage over Ohio workers … That's both indefensible and wrong. … The administration should be working to level the playing field for American workers, farmers and businesses, and that includes taking stronger actions against China when it cheats.” 

As noted by Politico’s “Morning Trade,” the Treasury Department “found no major trading partner was artificially depressing the value of its currency against the dollar in order to boost exports to the U.S.” China was kept on a monitoring list, established by Congress last year, which, according to Politico, means “the country's monetary policies will be closely watched during the next six months.” 

Germany, Japan, Korea, Switzerland, and Taiwan are also on the monitoring list. As The Washington Post explains, “Being on the list opens the way to U.S. negotiations over lopsided trade balances with the countries’ governments.” If those negotiations fail, then the United States can seek to impose trade sanctions against these countries—as long as it has the approval of the World Trade Organization. 

The Treasury Department’s report is available on its website.