- REUTERS/Toru Hanai
- President Donald Trump has often accused China of currency manipulation.
- There are several other countries who nearly meet the US Treasury Department’s definition of a currency manipulator.
- The Treasury’s next report detailing currency manipulation policies is expected to come out sometime this month.
When it comes to talking about currency manipulation, the focus is usually on China – but some countries are far closer to meeting the US Treasury Department’s criteria for the term.
The Treasury Department releases semiannual reports on the foreign exchange policies of major trading partners. They monitor for currency manipulation, or keeping a currency artificially weak relative to the US dollar.
Here’s the criteria a country has to meet to be named a currency manipulator:
- Have a significant trade surplus with the US
- Have a “material” current account surplus with the US
- Be engaged in “persistent, one-sided” intervention in the foreign exchange market
Thailand, South Korea, Japan and India all met two out of three of those criteria in 2017, according to analysis released Wednesday by TD Securities.
For starters, all of those countries ran trade surpluses with the US that met or exceeded $20 billion. So did China, by a landslide, but their current account balance and foreign exchange purchases complied with US standards.
Japan, South Korea and Thailand also ran current account surpluses of more 3% of GDP, which is the limit under currency manipulation standards. Thailand led the way in noncompliance, with a 14.7% current account surplus with the US.
While India actually led a current account deficit, its foreign exchange purchases exceeded 2% of GDP.
The next report is likely to be released in mid-April.
- TD Securities