WASHINGTON (AP) – The Biden administration will not name any country as currency manipulator, but it has named China, Vietnam and Taiwan among nations that have broken global agreements not to use their currencies to gain unfair trade advantages.
In a report to Congress released on Friday, the Treasury Department cited China for a number of failures that prevent its trading partners from having full knowledge of how it manages its currency.
The Treasury plans to closely monitor the foreign exchange activities of Chinese state-owned banks to get a clearer picture of China’s foreign exchange practices, according to the report.
Vietnam and Taiwan have violated a number of criteria that would justify naming them currency manipulators and both will be watched closely in the coming months to see what improvements they make in their monetary practices, according to the report.
The new report placed 12 countries on a watch list for further consideration. The 12 are China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, Mexico, and Switzerland. All nations except Switzerland were on the watch list in April’s last currency report.
“The Treasury is working tirelessly to promote a stronger and more balanced global recovery that benefits American workers, including through closer engagement with major economies on currency issues,” Treasury Secretary Janet Yellen said in a prepared press release.
Being named as a currency manipulator under U.S. law does not result in any immediate penalty, but it does require the Treasury to enter into negotiations with the foreign country in an effort to get it to change its currency practices.
If these negotiations fail, the administration can impose trade sanctions. These sanctions can be challenged by countries before the World Trade Organization.
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