Treasury Declines to Name Any Major US Trade Partners as Currency Manipulators
The Treasury Department declined to name any significant U.S. trade partner a currency manipulator in its semi-annual report to Congress on International Economic and Exchange Rate Policies. The report focuses on economic, financial and exchange rate developments and trends through the end of September, Treasury said in a statement (here). Chinese changes to the renminbi (RMB) exchange rate in August sparked an outcry on Capitol Hill as lawmakers said the Chinese action amounts to manipulation (see 1509150055).
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The Treasury report said it is continuing to assess Chinese currency movements but dismissed the idea that the exchange rate changes amounted to manipulation. “The move surprised markets, underscoring the importance of conducting macroeconomic policy transparently,” said the statement. “The Department of the Treasury is carefully monitoring the implementation of the new exchange rate policy approach and how it will work in practice—specifically, whether China will allow the RMB to respond to market forces for appreciation as well as for depreciation.”
Some U.S. manufacturers said the Treasury decision will jeopardize U.S. competitiveness globally. "By passing the buck yet again, the Treasury Department is likely eroding confidence that any currency half-measure agreed to as part of the Trans-Pacific Partnership deal will be aggressively implemented," said the Alliance for American Manufacturing in a statement (here). That group also called on Congress to pass Customs Reauthorization to safeguard domestic manufacturing.