US Treasury Department accuses Switzerland and Vietnam of currency manipulation | Economy

Employee at Asia Commercial Bank in Hanoi, Vietnam, in 2008.Cheetos Suzuki / AP

he is US Department of the Treasury Switzerland and Vietnam were accused on Wednesday of manipulating their currencies to gain unnecessary trade advantages, and requested by China, a country with which it has been partnering for months in Fierce trade war, Be more “transparent”. “Vietnam and Switzerland are manipulating their currencies,” the Treasury Department announced, after assessing the macroeconomic behavior of 20 of its major trading partners between July 2019 and June 2020.

Dozens of other countries, including Germany, Japan and Italy, are under surveillance, on a special watchlist joined by Taiwan, Thailand and India, from which they left Ireland. Since January this year, Washington has no longer considered China manipulating the renminbi, the official name for its currency, but the country remains under surveillance.

Indictment is an extremely rare measure that can lead to sanctions and tariffs, unless the dispute is resolved through negotiations.

“At least part of the administration [de Suiza y Vietnam] From the exchange rate during the four quarters [desde julio de 2019] Until June 2020, particularly foreign exchange intervention, the goal was to avoid effective balance of payments adjustments, ”the Treasury (US Department of Economy) explains in the statement. It also accuses Vietnam of trying to seek an“ unfair competitive advantage in international trade. ”

To fall into the manipulator category, the country must have a trade surplus with the United States of at least $ 20,000 million, a foreign currency intervention that exceeds 2% of GDP and a current account surplus that also exceeds that percentage.

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Like the diplomatic frenzy unleashed by the outgoing administration in the Middle East, a decision of this kind – the third in government Donald TrumpIn the middle of the transition process and before the imminent replacement of the presidency in the White House. But the Treasury move was anticipated by many analysts, at a time when the pandemic is changing trade flows and when the United States’ deficit in relation to its partners widens.

In 2019, Washington applied the same designation to China, for the first time since 1994 and in the middle of bilateral trade negotiations, but it later dropped this indictment.

The accusation of Switzerland and Vietnam is expected to provoke bilateral negotiations between each of those affected with the United States, in which it is participating International Monetary Fund (IMF), In it, Washington will seek to “remove the unfair trade advantages that result from the actions of those countries,” according to the Treasury memo. If the attempt does not work, the next step is to adopt sanctions. It remains to be seen whether it is new President-elect Joe Biden It keeps both countries listed this way, as many unions and the more progressive wing of the Democrats defend.

According to Treasury Secretary Stephen Mnuchin, the wake-up call for Switzerland and Vietnam seeks to “protect economic growth and opportunities for American workers and companies.”

The Treasury Department also listed ten of the United States’ largest trading partners on a special watchlist for their monetary practices: China, Japan, South Korea, Germany, Italy, Singapore, Malaysia, Taiwan, Thailand and India. The last three – Taiwan, Thailand and India – appear on that list for the first time, while Ireland leaves the list.

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