US Treasury Concludes "No Currency Manipulators", Watch List Expands to 9


The Treasury has three requirements for identifying currency manipulators. Seven countries meet two criteria.

The Treasury Department just released its May 2019 Macroeconomic and Foreign Exchange Policies of Major Trading Partners report to Congress.

The report concludes there are no countries meet the required currency manipulation criteria.

Three Criteria

  1. Significant bilateral trade surplus with the United States
  2. Material current account surplus
  3. Country engaged in persistent one-sided intervention in the foreign exchange market

No country met all three criteria. Only Singapore met condition 3, but it did not meet condition 1.

Country Evaluation

Summary of Findings

  • Pursuant to the 2015 Act, Treasury finds that no major trading partner met all three criteria in the current reporting period based on the most recent available data.
  • Eight major trading partners met two of the three criteria for enhanced analysis.
  • One major trading partner, China, constitutes a disproportionate share of the overall U.S. trade deficit.
  • These nine economies – China, Japan, Korea, Germany, Italy, Ireland, Singapore, Malaysia, and Vietnam – constitute the Treasury’s Monitoring List.

Question of the Day

How soon will Trump propose modifying the rules so he can claim China is a currency manipulator?

Even then, note that China fails test number 2. China's overall net balance of trade is primarily US-based.

For comparison purposes, look at Germany or Japan.

Leprechaun Economics

It's amusing to see Ireland on the watch list. It's an artificial abstract of tax avoidance policy.

What Country Isn't a Manipulator?

If you count the Fed, ECB, Bank of China, Bank of Japan, etc., interest rate manipulations, it's easy to arrive at the correct conclusion: Every Country is a Currency Manipulator.

Mike "Mish" Shedlock

Comments (5)
No. 1-5

False attempts to label and manipulate a country are like the same Treasury/Fed attempts to label and manipulate legal US businesses, a violation of the free market. Google "Operation Choke Point" or go here:


You have answered this before I think, so forgetting all the tariffs, subsidies and everything else, how much would it help reduce our 1 billion a day trade deficit with China if we could get them to let their currency float and trade like most of our trading partners, or might it even surprise and move down if they did so?



"how much would it help reduce our 1 billion a day trade deficit with China if we could get them to let their currency float?"

The yuan could easily crash. Recall that China has been propping up the yuan to stop capital flight. A crashing yuan would make their exports cheaper.



If you claim China manipulates its currency , why not the U.S.? We conduct open market operations, change interest rates , make policy statements all things that can impact exchange rates, but let me get this right, simply because a country has a trade surplus its a currency manipulator? Why not the inverse, A country that has a persistent deficit might be manipulating as well


Surprise, surprise!! Another childish, arbitrary, simpletonian classification scheme. By and for the usual progressive stringpuppets! Utterly economically irrelevant, of course, like anything undertaken by the dunces charged with holding up our progressive dysopia. "Those guys, and, like, that guy, and, like, that one: We have, like, deemed, or found, or, like, decided, or ruled that, like, they are, like, hobgoblins and, like, stuff!! And like, we should, like, all cheer for, like, Dear Leader to, like, tweet something mean about them, and like.."

Global Economics