B2B Payments

China, Germany Added To US Treasury FX Watch List

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The U.S. Treasury has added five nations to its list of trading partners with foreign exchange policies that need to be monitored, according to reports on Saturday (April 30).

China, Germany, Japan, Korea and Taiwan are each on the list due to their currency practices, according to reports. While the Treasury said none of these nations are accused of currency manipulation or meet officials’ threshold for extra policy monitoring, changes in these markets’ FX practices have warranted their placement on the list, reports said.

The updated list was revealed in a report sent by the Treasury to Congress.

New customs regulations mean these countries fit the criteria to be monitored over the next six months, reports added. The regulation looks to assess a country’s currency exchange policies and practices to assess whether they are looking to position themselves with an advantage in the global trade market.

“These new tools significantly enhance Treasury’s ability to undertake a data-driven, objective analysis of a country’s foreign exchange policies and their impact on bilateral trade with the United States and the broader multilateral trade position,” the Treasury explained in a statement.

Reports by The Hill explained the updated guidelines to monitor a nation’s FX policies.

“The three criteria are whether a country has a significant bilateral trade surplus with the United States, whether it has a material current account surplus with the rest of the world and whether it has engaged in persistent one-sided intervention in the foreign exchange market,” said reports.

Germany, China, Japan and South Korea were found to have a significant bilateral trade surplus, each of at least $20 billion; Taiwan was concluded to have engaged in one-sided intervention with the FX market, according to reports.

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