dglobalnews.com USA keeps Taiwan on currency monitoring list
Published: Wed, April 26, 2017
Markets | By Armando Jensen

USA keeps Taiwan on currency monitoring list


U.S. Treasury Department on Friday declared that no major trading partner of the U.S., including China, met the standard of manipulating its currency, while six economies were listed on its Monitoring List as their foreign exchange polices bear close monitoring.

Like the last report by the Obama administration in October, China met only one of the three criteria - for having a large trade deficit - that's used by the Treasury as a threshold for manipulation.

"While China now meets only one of the three criteria for currency manipulation listed in the report, the text makes clear that China's large bilateral trade surplus with the United States is by itself enough to warrant careful scrutiny of China's trade and currency practices", Prasad said.

The department, however, concluded that no major USA trading partner is manipulating its currency to gain an unfair trade advantage, suggesting President Donald Trump has backed away from his campaign pledge to label China a currency manipulator.

The Wall Street Journal paraphrased Trump as saying that the reason he changed his mind on the currency issue was because China has not been manipulating its yuan for months and because taking the step now could jeopardize his talks with Beijing on confronting the threat from North Korea. He publicly retreated from that position after meeting with Chinese President Xi Jinping in Florida last weekend. The reversal by the Treasury department was one of the aslmost half-a-dozen instances when Donald Trump or his administration have gone back on his poll campaign promises.

"They're not currency manipulators", Trump told the Journal about China.

This week, Trump abandoned a campaign vow to label China a currency manipulator.

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The poll showed that an impressive 96 percent of Trump voters would vote for Trump again today - but that four percent would not. This week, Trump has made an effort to call attention to his accomplishments during the first weeks of his administration.

The report showed the high priority the administration puts on addressing trade imbalances and said it would be "scrutinizing China's trade and currency practices very closely".

The department, however, said that both China and Germany should do more to reduce their large trade surpluses with the US.

China, which has since 2011 joined Russian Federation to veto six UN Security Council resolutions on Syria, abstained from a vote Wednesday on a USA -led proposal criticizing last week's chemical weapons attack. "When the president fails to label them a currency manipulator, he gives them a green light to steal our jobs and wealth time and time again".

Trump has softened his rhetoric against China's trade practices as Beijing has intervened in foreign exchange markets to prop up the value of its yuan, and as he looks to China for help dealing with rising tension on the Korean peninsula.

"When our trading partners engage in currency manipulation, they impose significant, and often long-lasting hardship on American workers and businesses", he said.

The other countries all meet two criteria on the list. Germany, South Korea and Switzerland should increase public borrowing to support domestic demand for goods and services, the report suggested.

It also called on Taiwan to be more transparent in its purchases of currency on global markets.

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