US stops short of branding Taiwan as a currency manipulator
- But island, along with Vietnam and Switzerland, tripped its thresholds for possible currency manipulation under a 2015 US trade law
- US Department of the Treasury says it will initiate enhanced engagement with Taipei in line with the Trade Facilitation and Trade Enforcement Act of 2015
In the first semi-annual foreign exchange report issued by US Treasury Secretary Janet Yellen, the treasury said it would commence “enhanced engagement” with Taiwan and continue such talks with Vietnam and Switzerland after the Trump administration labelled the latter two as currency manipulators in December.
The treasury said Taiwan, Vietnam and Switzerland exceeded its 2015 currency thresholds during 2020 – a more than US$20 billion bilateral trade surplus with the United States, foreign currency intervention exceeding 2 per cent of gross domestic product and a global current account surplus exceeding 2 per cent of GDP.
Despite this finding, the treasury said there was insufficient evidence under an earlier 1988 law to conclude that Vietnam, Switzerland or Taiwan were manipulating their exchange rates to gain a trade advantage or prevent balance of payments adjustments.
The move takes some pressure off of Switzerland and Vietnam by lifting the manipulator designation at least for the next six months.
The Swiss National Bank denied that it manipulates the Swiss franc and said the report would not alter its monetary policy.