(Adds more details from Treasury report, background)
By David Lawder
WASHINGTON Oct 14 The U.S. Treasury said on
Friday that none of the United States' major trading partners is
manipulating its currency to gain advantage for its exports, in
contrast to Republican presidential candidate Donald Trump's
threats to declare China a currency manipulator if he is
In its 16th and final currency report under President Barack
Obama, the Treasury said it added Switzerland to a foreign
exchange "monitoring list" of countries with high external
surpluses or currency market interventions.
It also kept China, Japan, Germany, South Korea and Taiwan
on the list, first launched in April. But it said none of the
six countries met the standard for enhanced scrutiny under a new
trade enforcement law passed in 2015.
Treasury said that for the 12 months through June, it has
"concluded that no major trading partner of the United States
met the standard of manipulating the rate of exchange between
its currency and the United States dollar for purposes of
preventing effective balance of payments adjustments or gaining
unfair competitive advantage in international trade."
Trump said in June that if elected, he would immediately
"instruct my Treasury secretary to label China a currency
manipulator, which should have been done years ago."
But based on the criteria for its currency monitoring list,
Treasury said China's performance actually improved since the
April report. It now meets only one of the three criteria, its
$356 billion bilateral goods trade surplus with the United
China's current account surplus fell below the threshold of
three percent of gross domestic product, and it has not been
engaged in "persistent one-sided intervention" despite two yuan
devaluations. In fact, Treasury said China has spent more than
$570 billion worth of foreign exchange assets to keep the yuan
from depreciating further in the year to August.
China could actually drop off the Treasury monitoring list
next April if the current account surplus remains below the
threshold and it is not found to be purchasing foreign exchange
to halt a rise in the yuan.
Treasury said Germany, Japan and South Korea remained on the
monitoring list because of material current account surpluses
and significant bilateral trade surpluses with the United
States. It said South Korea had intervened in foreign exchange
markets both ways, to prevent the won from depreciating and
later to limit its rise against the dollar.
Switzerland got on the list because of its trade growth with
the United States in the past year, a large current account
surplus and consistent purchases by the Swiss National Bank of
foreign assets since it abandoned last year what was effectively
a euro peg.
Treasury said Taiwan's current account surplus was well
above its threshold and it had purchased about $1 billion a
month during the 12 months through June to limit the Taiwan
(Reporting by David Lawder; Editing by Chizu Nomiyama)