The U.S. Treasury Department ("Treasury") issued a Report to Congress on Foreign Exchange Policies of Major Trading Partners of the United States. The Report contains a "Monitoring List" identifying major trading partners whose currency practices "merit close attention" based on the following three criteria specified in the Trade Facilitation and Trade Enforcement Act of 2015:

  • The trading partner has a bilateral trade surplus of at least $20 billion with the United States;
  • There is an account surplus that is at least 3% of GDP; and
  • "Persistent, one-sided intervention occurs when net purchases of foreign currency are conducted repeatedly and total at least 2 percent of an economy's GDP over a 12 month period."

No trading partner met all three of the criteria. The Report contains a monitoring list for economies that met two out of three. For the current reporting period, the list included China, Germany, Japan, Korea, Switzerland and Taiwan. Even though China was not identified as meeting all three criteria, Treasury was critical of China's currency practices and asserted that the country had (i) a long history of "engaging in persistent, large-scale, one-way foreign exchange intervention, doing so for roughly a decade to resist renminbi . . . appreciation," and (ii) "continues to pursue a wide array of policies that limit market access for imported goods and services."

Treasury noted that ensuring a level international playing field is a high priority for the Trump Administration, and maintained that "when our trading partners engage in currency manipulation, they impose significant, and often long-lasting, hardship on American workers and companies." Additionally, Treasury asserted a zero-tolerance approach to unfair trading:

"The United States cannot and will not bear the burden of an international trading system that unfairly disadvantages our exports and unfairly advantages the exports of our trading partners through artificially distorted exchange rates. Treasury is committed to aggressively and vigilantly monitoring and combatting unfair currency practices."

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