U.S. President Donald Trump waves as he and China's President Xi Jinping walk along the front patio of the Mar-a-Lago estate after a bilateral meeting in Palm Beach, Florida, U.S., April 7, 2017. REUTERS/Carlos Barria - RTX34M9Y
The Trump administration has placed six of its major trading partners including China and Japan on a "monitoring list" to keep a close watch on their currency practices.
It has placed China, Germany, Japan, Korea, Switzerland and Taiwan in the monitoring list in its six-monthly report to the Congress.
"Treasury finds that six major trading partners warrant being placed on the monitoring list for special attention: China, Germany, Japan, Korea, Switzerland and Taiwan," the report said.
The US Department of Treasury yesterday concluded that no major trading partner of the US met the Congressional standards for currency manipulation in the second half of 2016.
Additionally, US Department of the Treasury established a "monitoring list" of major trading partners that merit close attention to their currency practices.
"An essential component of this Administration's strategy is to ensure that American workers and companies face a level playing field when competing internationally," said Treasury Secretary Steven Mnuchin.
When our trading partners engage in currency manipulation, they impose significant, and often long-lasting hardship on American workers and businesses," he said.
"Expanding trade in a way that is freer and fairer for all Americans requires that other economies avoid unfair currency practices, and we will continue to monitor this carefully," he said.
In a statement, the Treasury said the findings and recommendations of the Report are intended to combat potentially unfair currency practices and support the growth of free and fair trade.
"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," it said.
Treasury is committed to aggressively and vigilantly monitoring and combating unfair currency practices, it added.
The Opposition Democratic party leaders slammed Trump Administration for going back on its poll promise.
"Unfortunately the President's failure to name China a currency manipulator is symptomatic of a lack of real, tough action on trade against China. China steals our intellectual property, doesn't let American companies compete in China, and has manipulated their currency causing the loss of millions of jobs," said Senate Minority Leader Charles E Schumer.
While they're not manipulating their currency at the moment because it doesn't suit their economic needs, make no mistake about it, as soon as the tide turns they will, he said.
"When the President fails to label them a currency manipulator, he gives them a green light to steal our jobs and wealth time and time again," he said.
"The best way to get China to cooperate with North Korea, is to be tough on them with trade, which is the number one thing China's government cares about," he said.
However, in its report the Treasury alleged that China has a long track record of engaging in persistent, large- scale, one-way foreign exchange intervention, doing so for roughly a decade to resist renminbi (RMB) appreciation even as its trade and current account surpluses soared.
China continues to pursue a wide array of policies that limit market access for imported goods and services, and maintains a restrictive investment regime which adversely affects foreign investors, it said.
Treasury said it will be scrutinising China's trade and currency practices very closely, especially in light of the extremely sizable bilateral trade surplus that China has with the United States.
"China will need to demonstrate that its lack of intervention to resist appreciation over the last three years represents a durable policy shift by letting the RMB rise with market forces once appreciation pressures resume," it said.
"Treasury places significant importance on China adhering to its G-20 commitments to refrain from engaging in competitive devaluation and not to target China's exchange rate for competitive purposes.
Treasury also places high importance on greater transparency of China's exchange rate and reserve management operations and goals," said the report.