The administration of US President Joe Biden said it would not designate any country as a currency manipulator, but did name Taiwan, China and Vietnam among the nations that have failed to live up to global agreements not to use their currencies to gain unfair trade advantages.
In a report to the US Congress released on Friday, the US Department of the Treasury cited China for a number of failures that prevent trading partners from gaining full knowledge of how it manages its currency.
The Treasury plans to closely monitor the foreign exchange activities of China’s state-owned banks to get a clearer picture of the country’s currency practices, the report said.
Taiwan and Vietnam have contravened a number of criteria that would justify naming them as currency manipulators and would be watched closely in the coming months to see what improvements they make in their currency practices, the report said.
The report placed 12 nations on a monitoring list for increased scrutiny.
They are China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, Mexico and Switzerland.
All the nations with the exception of Switzerland were on the monitoring list in the last currency report in April.
“Treasury is working relentlessly to promote a stronger and more balanced global recovery that benefits American workers, including through closer engagement with major economies on currency-related issues,” Secretary of the Treasury Janet Yellen said in a statement.
The latest report assessed exchange rates and economic policies in the four quarters through June.
A manipulator designation has no specific or immediate consequence, but US law requires the administration to engage with those trading partners to address the perceived exchange-rate imbalance.
Penalties, including exclusion from US government contracts, could be applied after a year if the label remains.
Those sanctions can be challenged by countries before the WTO.
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