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The US Treasury has issued its semiannual Report to Congress. It was involved on the Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States. Within this report, the Treasury conducted an in-depth analysis and evaluation of the policies pursued by significant U.S. trading partners. Encompassing approximately 78% of U.S. foreign trade. Vary in goods and services during the four quarters leading up to June 2023.
Secretary Yellen Addresses Resilience and Uncertainties in the Global Economy
Secretary of the Treasury Janet L. Yellen underscored, “The global economy proved that it is strong and exceeded the expectations from a year ago”. Nevertheless, the global economic outlook remains clouded by considerable uncertainty stemming from various factors. Including Russia’s ongoing conflict with Ukraine. Also geopolitical tensions in the Middle East, persistent core inflation. And the potential deepening of challenges in China’s real estate sector.
Over the report’s time frame, the majority of foreign exchange interventions by U.S. trading partners were characterized by the selling of dollars. Actions that reinforced the strength of their respective currencies. Nonetheless, the Treasury maintains a vigilant stance on currency practices in these nations. Also the Biden Administration remains firm in opposing any attempts by U.S. trading partners to manipulate their currency values artificially in ways that disadvantage American workers.”
Also Read: Core PCE Falls and U.S. Economy Surpasses: Emphasis Dilemma
US Treasury Report on Trading Partners’ Currency Practices and Monitoring List
In compliance with the Omnibus Trade and Competitiveness Act of 1988, the US Treasury report delved into the practices of the United States’ major trading partners. And ultimately determined that none of these significant trading partners engaged in currency manipulation to impede the effective balance of payments adjustments or to gain an unfair competitive advantage in international trade during the four quarters leading up to June 2023.
Furthermore, the Treasury’s report revealed that none of these major trading partners met all three criteria warranting enhanced scrutiny under the Trade Facilitation and Trade Enforcement Act of 2015 during the four quarters concluding in June 2023.
The Treasury’s “Monitoring List” now includes six economies, designated for close scrutiny regarding their currency practices and macroeconomic policies. These economies are China, Germany, Malaysia, Singapore, Taiwan, and Vietnam.
The report also reiterated the Treasury’s call for heightened transparency on the part of China. China’s lack of disclosure regarding foreign exchange interventions and its broader opacity concerning key aspects of its exchange rate mechanism distinguish it from other major economies, justifying ongoing monitoring by the Treasury.
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