WASHINGTON: The US Treasury on Wednesday accused Switzerland and Vietnam of manipulating their currencies, partly to gain a trade advantage.
In the semi-annual foreign exchange report, Treasury found the two countries were intervening in currency markets to affect balance of payments, and in the case of Vietnam, also aimed at “gaining unfair competitive advantage in international trade”.
US Treasury Secretary Steven Mnuchin called the decision “a strong step … to safeguard economic growth and opportunity for American workers and businesses”.
China remains on Treasury’s “Monitoring List” of major trading partners that merit close attention to their currency practices, along with Japan, Korea, Germany and others.
Treasury added three countries to the list: India, Taiwan and Thailand.
The report called on China to “improve transparency” of its exchange rate management, in particular intervention in currency markets.
President Donald Trump has repeatedly railed against countries that have trade surpluses with the US, accusing many of them of using a weaker currency to sell their goods more cheaply at the expense of US producers.
The findings in the report do not entail sanctions, but trigger “enhanced bilateral engagement” with each country to urge “development of a plan … to address the underlying causes of currency undervaluation and external imbalances”.
Treasury reviewed 20 major US trading partners with bilateral goods trade with the US of at least US$40 billion annually.
The criteria are a large trade surplus with the US, a significant current account surplus, and evidence of “persistent, one-sided intervention” in foreign exchange markets.
Switzerland and Vietnam were found to meet all three criteria, the report said.