Sun, Apr 15, 2018 - Page 16 News List

US spares China ‘manipulator’ label

FINDING BALANCE:If the US is unhappy with the trade concessions offered by another country it can impose punitive tariffs, but that country is still able to appeal to the WTO


US President Donald Trump’s administration has once again declined to brand China a currency manipulator, but it did target that country and five others for special monitoring for what the administration says are practices that are worsening the US’ trade deficit.

In a report it must issue every six months, the administration on Friday said that no country met the criteria to be labeled a currency manipulator. However, six nations — China, Japan, South Korea, India, Germany and Switzerland — were placed on a watch list subjecting them to added US pressure to lower trade surpluses.

India is new to the list. The five other nations were cited in October last year.

The report comes at a time when Trump is threatening to impose penalty tariffs on China and other nations, which have sent global financial markets on a roller-coaster ride.

No country has been labeled a currency manipulator by the US since the Clinton administration tagged China in 1994. Such a designation subjects a country to negotiations in an effort to lower the trade gap.

If the US is not satisfied with the trade concessions offered by the targeted country it can impose punitive tariffs, although the offending country can appeal to the WTO.

The administration is “working vigorously to ensure that trade is free, fair and reciprocal,” US Secretary of the Treasury Steven Mnuchin said in a statement accompanying the report.

The US Department of the Treasury would continue to monitor and combat unfair currency practices while encouraging countries to pursue reforms to reduce large trade imbalances, he said.

The report cited China’s “extremely large and persistent” trade surplus with the US and “the increasingly non-market direction of China’s economic development,” which it said poses growing risks to China’s trading partners and the global economy.

The US trade deficit in goods and services totaled US$566 billion last year, the largest annual deficit since 2008 and up 12 percent from 2016.

The deficit in goods with China hit a record US$375.2 billion, as usual the largest imbalance the US runs with any country.

India had a “significant bilateral goods” surplus with the US of US$23 billion last year, the report said.

Germany has the world’s largest current account trade surplus in US dollar terms and has held that position for most years since 2011, it said.

As previous reports have done, the treasury urged Germany to take steps to boost domestic demand as a way to increase imports of US and other foreign goods.

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