WASHINGTON • The United States has put Germany, China and three other East Asian economies on a new "monitoring" list of trade partners with excessive current account and trade surpluses.
Taiwan, South Korea and Japan are also on the new watchlist of the US Treasury revealed on Friday that points out countries Washington suspects are behaving unfairly to support their economies.
The new assessment expands on the previous biannual "currency manipulator" review mandated by Congress that threatened to punish any country found guilty of artificially holding its currency down to boost its exports. The Treasury said that the five on the new list each met two of three criteria for assessing unfair play in international trade.
None, however, met all three of the criteria that could lead to retaliation by US authorities, namely maintaining a significant trade surplus with the US, maintaining a current account surplus larger than 3 per cent of the country's GDP, and repeated intervention in the foreign exchange market to keep its currency from appreciating.
China, Japan, Germany and South Korea were seen as guilty of the first two criteria, but not the third. Taiwan was listed for its large current account surplus and persistent purchases of foreign exchange last year, keeping the New Taiwan dollar low against the US dollar.
China has been on the Treasury's watchlist for years for allegedly holding its currency down to gain a trade advantage. But the new report said that Beijing, since its surprise devaluation last August, has intervened heavily in foreign exchange markets in recent months to support its yuan currency rather than push it down.
As for Germany, which is a member of the euro zone and so not fully able to manipulate the shared euro currency, the Treasury said the country's big trade surplus with the US and its large budget surplus "represent substantial excess saving".