4 days ago
Trump administration adds Ireland to 'monitoring list' for currency manipulation
US president Donald Trump's new administration has added Ireland to its "monitoring list" of countries warranting close attention for currency manipulation.
In the first semi-annual currency report of the second Trump term, the Treasury Department said no major US trading partner manipulated its currency in 2024 but it nonetheless added Ireland and Switzerland to its monitoring list for extra foreign exchange scrutiny.
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Countries that meet two of the criteria – a trade surplus with the US of at least $15 billion (€13 billion), a global account surplus above 3 per cent of GDP and persistent, one-way net foreign exchange purchases – are automatically added to the list. Ireland and Switzerland were added due to their large trade and current account surpluses with the US.
While it did not label China a currency manipulator for now despite "depreciation pressure" facing its currency, the yuan, the department issued a stern warning to China, saying it "stands out among our major trading partners in its lack of transparency around its exchange rate policies and practices."
"This lack of transparency will not preclude Treasury from designating China if available evidence suggests that it is intervening through formal or informal channels to resist (yuan) appreciation in the future," Treasury said in a statement.
It said China, Japan, South Korea, Taiwan, Singapore, Vietnam, Germany, Ireland and Switzerland were on its monitoring list for extra foreign exchange scrutiny.
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The Swiss National Bank on Friday denied being a currency manipulator, but said it would continue to act in Switzerland's interests as the strong Swiss franc helped push inflation into negative terrain last month.
"The SNB does not engage in any manipulation of the Swiss franc," it said. "It does not seek to prevent adjustments in the balance of trade or to gain unfair competitive advantages for the Swiss economy."
Trump in his first term labelled China a manipulator in August 2019, a move made then – as now – amid heightened US-China trade tensions. The Treasury Department dropped the designation in January 2020 as Chinese officials arrived in Washington to sign a trade deal with the US.
Thursday's report was released hours after Trump spoke with China's leader Xi Jinping for the first time since returning to the White House amid an even more tense trade standoff between the world's two largest economies, and more recently a battle over critical minerals.
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The countries struck a 90-day deal on May 12th to roll back some of the triple-digit, tit-for-tat tariffs they had placed on each other since Trump's January inauguration.
The latest report covers the final full year of the administration of Trump's predecessor, Joe Biden, who over his four-year term never labeled any trading partner a currency manipulator but raised similar concerns over China's behaviour and lack of transparency.
Last year was marked generally by broad-based dollar strengthening, with the US currency gaining 7 per cent in 2024 against a basket of major trading partners' currencies.
That could change over the course of this year, with the dollar already down by roughly 9 per cent since Trump returned to the White House and launched a trade war that has global investors rethinking their commitments to US assets.
