The Trump administration has again decided not to label China or any other country as a currency manipulator. But in a report to Congress on Tuesday, the administration is keeping China on a list of countries whose trade surpluses with the United States and other indicators are closely tracked.
The administration said that no country meets the criteria to be labeled as one seeking to gain unfair trade advantages over the United States by manipulating its currency. But the report said that nine nations — China, Germany, Ireland, Italy, Japan, South Korea, Malaysia, Singapore and Vietnam — are on the monitoring list.
Two nations — India and Switzerland — that had been on the previous watch list issued in October were removed.
Under a 1988 law, the Treasury Department is required to report to Congress every six months on whether any countries are manipulating their currencies to gain trade advantages over the United States. Such a finding could lead to trade sanctions. A 2016 law expanded the criteria Treasury was to use in making its assessment.
No country has been named a currency manipulator since the Clinton administration slapped the label on China in 1994. During the 2016 campaign, Donald Trump vowed to brand China a currency manipulator as soon as he took office. But so far, the administration has passed up five opportunities to do so in the twice-yearly currency report.
Officials contend that placing a country on the monitoring list allows the administration to bring pressure to bear through informal negotiations.
“The Treasury Department is working vigorously to achieve stronger growth and to ensure that trade expands in a way that helps U.S. workers,” Treasury Secretary Steven Mnuchin said in a statement. “Treasury takes seriously any potentially unfair currency practices.”
In the latest report, the department expanded the potential list of nations it reviewed from around a dozen to 21 by lowering the threshold for review in such areas as the size of the country’s trade surplus with the United States, the size of the trade surplus with the world and the number of times the country intervenes in currency markets.
The previous currency report in October had listed six nations for special monitoring. While dropping India and Switzerland from the new watch list, the latest report kept four nations — China, Germany, Japan and South Korea — and added Ireland, Italy, Malaysia, Singapore and Vietnam.
The United States and China are locked in a bitter, year-long trade dispute which has seen the Trump administration recently boost tariffs on $250 billion of Chinese goods after talks broke off earlier this month. The U.S. charges that China is stealing technology, unfairly subsidizing its own companies and forcing U.S. companies to hand over trade secrets if they want access to the Chinese market.
Trump has vowed to reduce America’s huge trade deficit with China, the largest with any nation, which he says has cost millions of American jobs. But the current trade war has prompted China to impose retaliatory tariffs on U.S. goods including sales of agricultural products such as soybeans.