The United States has added South Korea to its “monitoring list” of major trading partners whose currency practices call for closer attention, according to a Treasury Department report released Thursday.
The semi-annual report looks into countries with large trade surpluses with respect to the United States that also actively intervene in foreign exchange markets to gain a competitive advantage.
It concluded that no major US trading partner manipulated its exchange rate to prevent “effective balance of payments adjustments” or gain unfair competitive advantage in global trade in the four quarters through June 2024.
Besides South Korea, other economies on the monitoring list were China, Japan, Taiwan, Singapore, Vietnam, and Germany.
Of the group, Japan, South Korea, Taiwan, Vietnam and Germany met two of three criteria to merit enhanced analysis.
These were “having a significant bilateral trade surplus with the United States and a material current account surplus”.
Singapore was said to have engaged in “persistent, one-sided foreign exchange intervention”.
Malaysia, which was previously on the monitoring list, has been removed.
In keeping China on the list, the Treasury cited the country’s “failure to publish foreign exchange intervention and broader lack of transparency around key features of its exchange rate mechanism”.
The Treasury called China “an outlier among major economies” adding that Beijing also holds “outsized trade imbalance with the United States”.
“Treasury firmly advocates for our major trading partners to adopt policies that support strong, sustainable, and balanced global growth and reduce excessive external imbalances”, said Treasury Secretary Janet Yellen in a statement.
