US Treasury Secretary Steve Manusin (Photo = Yonhap News)-The Donald Trump administration has designated Switzerland and Vietnam as currency manipulators. Korea, China, and Japan maintained the’exchange rate observable countries’.
According to Reuters and others on the 16th (local time), the US Treasury Department published a report on macroeconomic and exchange rate policy of major trading partners on this day.
It was announced that Korea, China, Japan, Germany, Italy, Singapore, Malaysia, etc. are subject to exchange rate observation. Taiwan, Thailand, and India were added as target countries to observe the exchange rate, making it a total of 10 countries.
The countries subject to exchange rate observation are: △A trade surplus with the US exceeding 20 billion dollars in the past year △A current account surplus exceeding 2% of Gross Domestic Product (GDP) △Continuous and unilateral foreign exchange that net purchases foreign exchange exceeding 2% of GDP for 12 months It is designated by three criteria, including market intervention.
If it meets two of the three criteria, or if the size or proportion of the trade surplus with the US is large, it is classified as a target country.
The Ministry of Finance explained that Korea is a target country for exchange rate observation because Korea has a trade surplus of over 20 billion dollars with the US and a current account surplus of 3.5% of GDP.
The Ministry of Finance said that China, which was designated as the currency manipulator in August of last year, was lifted by the first phase of the US-China trade agreement earlier this year, “I urged to improve transparency in the management of exchange rates.”
Switzerland and Vietnam are newly included as currency manipulators.
The U.S. government demands corrections from countries designated as currency manipulators, and if it does not improve after a year, it may impose sanctions such as restrictions on investment by U.S. companies.
In response, the Swiss Central Bank (SNB) issued a statement and said it was “ready to contact US authorities to explain Switzerland’s economic situation and monetary policy.”
Vietnam’s Ministry of Trade declined to announce its position and passed the matter to the Ministry of Foreign Affairs, Reuters said.
Meanwhile, Reuters said in a report in April next year that the results of the evaluation could change after Joe Biden took office.
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