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The U.S. Treasury's Foreign Exchange Report Signals a Shift in Approach

MIN READApr 20, 2021 | 21:33 GMT

The seal U.S. Treasury Department is seen on March 27, 2020, in Washington D.C.

(OLIVIER DOULIERY/AFP via Getty Images)

The U.S. Treasury Department’s decision not to name any country a currency manipulator in its latest foreign exchange report helps depoliticize the analysis and reorient it into a tool for cooperative consultations. On April 16, the Treasury released its first semi-annual report on foreign exchange practices of major U.S. trading partners since President Joe Biden took office in January. The latest report identified Switzerland, Taiwan and Vietnam as meeting the Treasury’s quantitative criteria for currency manipulation in order to achieve an unfair trade advantage, and noted the United States was in consultations with all three countries to address currency undervaluation and payments imbalances. But the Treasury opted not to go so far as officially labeling any country a currency manipulator, given the exceptional circumstances of the past year. ...

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