US Treasury announced that nine countries are put in the “monitoring list” on currency manipulation, but no major trading partner is named as manipulator. The nine countries include China, Germany, Ireland, Italy, Japan, Korea, Malaysia, Singapore, and Vietnam. That conclusion was made even after the Treasury revised and updated the thresholds it uses to assess where unfair currency practices or imbalanced macroeconomic policies may be emerging.
In the statement, US Treasury Secretary Steven Mnuchin singled out China and said “Treasury will continue its enhanced bilateral engagement with China regarding exchange rate issues, given that the RMB has fallen against the dollar by eight percent over the last year in the context of an extremely large and widening bilateral trade surplus.”
US Treasury also estimated that “direct intervention by the People’s Bank of China in the last year has been limited.” But it surged China to “take the necessary steps to avoid a persistently weak currency”. Also, it urged China to aggressively address market-distorting forces, including subsidies and state-owned enterprises, enhance social safety nets to support greater household consumption growth, and rebalance the economy away from investment.