Trump administration says no US trading partners manipulate currency

US Treasury Department on Friday declared that no major trading partner of the US, including China, met the standard of manipulating its currency, while six economies were listed on its Monitoring List to ensure extra scrutiny of their foreign exchange policies.

The Trump administration stopped short of branding China and Germany currency manipulators, despite having accused both countries of keeping their currencies artificially low to gain unfair advantage in trade with the U.S.

Japan, South Korea, Taiwan (Taiwan OTC: 6549.TWO - news) and Switzerland also were again included on Treasury's monitoring list.

"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", Treasury Secretary Steven Mnuchin said in a statement.

Washington D.C. [United States], Apr. 15: The Trump administration has not labeled any country, including China, as a currency manipulator in a report examining exchange rate fluctuations.

China met only one of the three criteria required to be labeled a currency manipulator - a large trade surplus with the United States - while Germany also met a second: a current account surplus amounting to more than three percent of the nation's economic output.

The report showed the high priority the administration puts on addressing trade imbalances and said it would be "scrutinizing China's trade and currency practices very closely". The report is the government's formal channel to impose the manipulator designation, leading to a year of negotiations for a solution and penalties if the practice continues.

The last time the US designated a country a currency cheater was China in 1994 under President Bill Clinton. Such tariffs, though, could be overturned in a review by the World Trade Organization.

With (Other OTC: WWTH - news) a trade surplus in goods with the United States of $347 billion previous year, and continued policies that restrict free trade and foreign investment, "Treasury will be scrutinizing China's trade and currency practices very closely". Europe's biggest economy should use fiscal policy to encourage strong domestic demand, which would put "upward pressure" on the euro. China's $347 billion goods trade surplus with the US was the largest of major trading partners a year ago, according to the report.

Upon announcing his candidacy in 2015, Trump said China's currency practices were making it impossible for U.S. companies to compete and declared, "They're killing us".

But in his interview with The Wall Street Journal, Trump said he had decided that China hadn't recently been manipulating its currency after all.

The report shows the Trump administration is taking an approach to foreign exchange based on data rather than politics, said Nathan Sheets, a former U.S. Treasury under secretary for global affairs during the Obama administration. The reversal by the Treasury department was one of the nearly half-a-dozen instances when Donald Trump or his administration have gone back on his poll campaign promises.