US Stop Calling Taiwan a “Currency Manipulator” Taiwan News

TAIPEI (Taiwan News) – The U.S. Treasury Department said on Friday, April 16, that there was insufficient evidence to qualify Taiwan as a currency manipulator despite the country having met its criteria for designation.

In a biannual foreign exchange report released by Treasury Secretary Janet Yellen on Friday, the department identified Vietnam, Switzerland and Taiwan as reaching its three thresholds for possible currency manipulation.

The criteria the ministry uses to classify a country as a currency manipulator are a trade surplus of at least US $ 20 billion with the United States, a foreign exchange intervention exceeding 2% of gross domestic product, and a current account surplus. exceeding 2% of GDP.

Taiwan was included on the watch list late last year after meeting the first two criteria by having a trade surplus of $ 30 billion and a current account balance exceeding 14.1% of its GDP. Its net foreign currency purchases recently reached 5.84% of its GDP.

Although all three U.S. trading partners have met the criteria, the agency said there was insufficient evidence at this time to conclude that they are manipulating their exchange rates to prevent balance adjustments. payments or gain an unfair competitive advantage in international trade. The US Treasury said it would begin “enhanced engagement” with countries to see if their actions violated the 1988 Omnibus Trade and Competitiveness Act.

The Treasury stressed that “significant actions to remedy political distortions and increase data transparency will be essential” in its engagements with Taiwan. He urged the country to only intervene in the foreign exchange market “under exceptional circumstances of disorderly market conditions” and said it should try to save less and invest more.

Although the Treasury has not designated China as a currency manipulator, it said the country will be included on the watch list along with 10 other economies: Japan, South Korea, Germany, Ireland, Italy, India, Malaysia. , Singapore, Thailand and Mexico.

Janice J. Kostka