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Treasury finds no currency manipulators, adds criteria based on deficits

April 24, 2017

The Treasury Department has not found that any country meets its criteria for currency manipulation in a much-anticipated report that for the first time says any country that accounts for "a large and disproportionate share" of the U.S. trade deficit will be more closely monitored.

[Jenny Leonard, Jack Caporal and Isabelle Hoagland] April 20th, 2017 [Inside U.S. Trade]

The semi-annual currency report to Congress -- released April 14 and long awaited for a verdict on China that was rendered earlier last week by President Trump -- listed the same countries on its monitoring list as it did in its last report, issued in October 2016: China, Germany, Japan, Korea, Taiwan and Switzerland.

Each of those six has met two of the three criteria for currency manipulation, as laid out in the Trade Facilitation and Trade Enforcement Act of 2015: a bilateral trade surplus with the U.S. that is larger than $20 billion; a material current account surplus larger than 3 percent of a country's GDP; and "persistent, one-sided intervention [when] net purchases of foreign currency, conducted repeatedly," exceed 2 percent of an economy's GDP over 12 months, the report states.

The new report says that as an "added measure," the Trump administration will "add and retain on the Monitoring List any major trading partner that accounts for a large and disproportionate share of the overall U.S. trade deficit even if that economy has not met two of the three criteria from the 2015 Act."

Read more at Inside U.S. Trade


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  • Again, the U.S. trade deficit in 2015 was 43% clothing, 23% automotive, 19% energy, 11% electronics, and only 4% steel. Read about it at: http://orcosportsmans.com/Pages/What%20Is%20The%20End%20Game.html
  • The most telling study on “steel” is the indirect steel imports. Auto parts, appliances, electronics all contain steel. I’d urge folks to read Unrestricted Warfare, a Chinese military study, on how to bring down a larger economic foe. It isn’t all about the raw material, it is about supply chains and downstream products. To ignore the nexus is to miss the strategy. They’d love for us to pursue the folly of thinking in single industry silos.
  • The U.S. trade deficit in 2015 was 43% clothing, 23% automotive, 19% energy, 11% electronics, and only 4% steel. Been to China. The air is acrid and the water feted. Steel should be the lowest priority in eliminating the trade deficit. How about the rest of the stuff from China. China is 50% of the trade deficit. Since renewal of MFN for China in 1998, the trade deficit has been driving our Federal deficit. The Federal deficit trajectory right now is straight down. We are running out of time!
  • Remains to be seen if the Goldman Sachs Treasury Department will ever declare the obvious.