US labels Vietnam & Switzerland ‘currency manipulators,’ puts China, India and others on watchlist

The US Treasury Department has designated Vietnam and Switzerland as “currency manipulators,” while placing China, India and several other countries on its “monitoring list.”

“The Treasury Department has taken a strong step today to safeguard economic growth and opportunity for American workers and businesses,” Secretary Steven Mnuchin said in a statement on Wednesday, as he unveiled the department’s report on the “manipulators.”

Treasury will follow up on its findings with respect to Vietnam and Switzerland to work toward eliminating practices that create unfair advantages for foreign competitors.

The designation greenlights a set of maneuvers, envisioned under the Omnibus Trade and Competitiveness Act of 1988, including calls for bilateral talks between the US and “manipulator” countries, as well as a complaint to the International Monetary Fund (IMF).

The “currency manipulator” designations is based on three criteria; a $20 billion-plus trade surplus with the US, current account surplus exceeding two percent of GDP and currency intervention exceeding two percent of GDP.

Both Switzerland and Vietnam meet the criteria, with the latter boasting a trade surplus of a whopping $57 billion, which has triggered repeated accusations from Washington that it is deliberately undervaluing its currency. Switzerland, which was added to the monitoring list in January, has already reacted to the designation with the Swiss National Bank promising to continue its aggressive monetary policies regardless of US pressure and saying it “does not engage in any form of currency manipulation.”

China, which was labeled a “currency manipulator” last August amid the heated trade war with the US, remains on the monitoring list. Beijing’s designation, which was not backed by the IMF, was withdrawn early this year, days before it reached a trade deal with Washington.

India, which had previously been accused of “questionable foreign exchange policies” but dropped from the list last year, was placed on it again. The Treasury urged New Delhi to “limit foreign exchange intervention” and further open the economy to “foreign investors.”

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