The move could pave the way for punitive action on Washington’s part unless the dispute can be resolved through “bilateral engagement.”
In a statement accompanying its semi-annual foreign exchange report, the US Treasury said Vietnam and Switzerland each kept their currencies down to prevent “effective balance of payments adjustments” and, in Vietnam’s case, “To gain an unfair competitive advantage in international trade. “.
The FX report has gained notoriety for its focus on China’s monetary policy in recent years. In 2019, the Trump administration called Beijing a currency manipulator at the height of the trade war between the world’s largest economies, but said that was no longer the case in January 2020 after the deal was struck. “phase one” commercial between Donald Trump and Xi. Jinping, the Chinese president.
In Wednesday’s report, China remained on the Treasury’s watchlist for its monetary policy, which also includes Japan, South Korea, Germany, Italy, Singapore, Malaysia, Taiwan, Thailand. and India. The last three countries were added to the watch list on Wednesday, while Ireland was taken off.
During Mr. Trump’s presidency, the US Treasury took a more aggressive approach to the foreign exchange practices of its trading partners compared to previous US administrations. This will present a dilemma for the new treasury of Joe Biden’s administration, which is expected to be led by former Fed Chairman Janet Yellen.
“The Treasury Department has taken an important step today to preserve economic growth and opportunities for American workers and businesses,” said Steven Mnuchin, US Secretary of the Treasury. “The Treasury will follow its findings regarding Vietnam and Switzerland to work to eliminate practices that create unfair advantages for foreign competitors.”