The United States Treasury has announced findings from its latest semi-annual report, confirming that no significant U.S. trading partners have manipulated their currencies to secure an unfair trade advantage over the past year. This assessment is based on a comprehensive review of economic practices and foreign exchange policies spanning four quarters up to December 2024. The report highlights that none of the major trading partners fulfilled all three criteria required for further scrutiny during this evaluation period.
A group of nations remains under close observation due to their currency practices warranting attention. Among these are China, Japan, South Korea, Singapore, Taiwan, Vietnam, Germany, Ireland, and Switzerland. Notably, Ireland and Switzerland were newly added to this monitoring list because of their substantial bilateral trade surpluses with the United States and their sizable global current account surpluses. Although China has not been labeled as a manipulator amid pressures related to yuan depreciation, it stands out among trading partners due to insufficient transparency regarding its exchange rate practices and policies.
Transparency is crucial for maintaining fair international trade relations. Despite potential challenges, the U.S. Treasury asserts that a lack of transparency will not hinder its ability to designate any country, including China, if evidence emerges indicating intervention through either formal or informal channels to prevent appreciation of its currency. The semi-annual report serves as an essential instrument for monitoring global macroeconomic imbalances and shaping diplomatic strategies concerning major economies such as China, Japan, and Germany. It underscores the importance of fostering transparent policies and cooperative measures to ensure balanced and equitable global trade practices.