United States Declines To Call Out China For Currency Manipulation
On Jan. 29, the U.S. Department of the Treasury released its semiannual report to the U.S. Congress on the macroeconomic and foreign exchange policies of major U.S. trading partners. Together, these countries comprised about 78 percent of U.S. foreign trade in goods and services from June 2024 to June 2025. The report found no major U.S. trading partner manipulated the rate of exchange between its currency and the U.S. dollar for purpose of preventing effective balance of payments adjustments or for the purpose of gaining unfair competitive advantage in international trade during that timeframe.
While the department did not designate the Chinese government as a currency manipulator, it said the communist country “stands out among” U.S. major trading partners for “its lack of transparency around its exchange rate policies and practices.” The department pledged “this lack of transparency will not preclude Treasury from designating China if available evidence suggests that it is intervening through formal or informal channels to resist RMB appreciation in the future.”
The report also placed China and nine other countries on the Treasury Department’s monitoring list for trading partners whose currency practices and macroeconomic policies merit close attention: Germany, Ireland, Japan, Singapore, South Korea, Switzerland, Taiwan, Thailand, and Vietnam.
“Treasury is closely monitoring whether our trading partners are acting through foreign exchange intervention and non-market policies and practices to manipulate their currencies for unfair competitive advantage in trade,” said U.S. Treasury Secretary Scott Bessent.
The report noted the Trump administration had initiated discussions with a number of trading partners that have regularly appeared on the U.S. government’s radar for currency manipulation. To date, the Treasury Department has released joint statements with the relevant authorities of six of those countries — Japan, Switzerland, Malaysia, Thailand, Korea, and Taiwan. These joint statements reinforce close consultations on macroeconomic and foreign exchange matters and reaffirm each party’s commitment to avoid manipulating exchange rates to prevent effective balance of payments adjustment or to gain an unfair competitive advantage.
The statements also highlight the importance of transparent exchange rate policies and practices, and seek to improve the frequency and timeliness of trading partners’ foreign exchange disclosures. Finally, the report said the Treasury Department has enhanced its vigilance regarding other policies that may influence foreign exchange markets through the use of capital controls, macroprudential measures, and other government investment vehicles such as government pension funds.