What's happened
The US Treasury's latest foreign-exchange report, released on June 5, 2025, did not label any country a currency manipulator but kept South Korea on its monitoring list alongside China and Japan. The report comes amid ongoing trade negotiations between the US and China, with potential implications for tariffs and currency practices.
What's behind the headline?
Key Insights
- Monitoring List: South Korea remains on the Treasury's monitoring list, indicating ongoing concerns about its currency practices, similar to China and Japan.
- Trade Negotiations: The timing of the report coincides with renewed trade talks between the US and China, suggesting a strategic approach to avoid escalating tensions.
- Potential Future Actions: Treasury Secretary Scott Bessent hinted at possible future sanctions against China if evidence of manipulation is found, indicating a cautious but firm stance.
- Market Reactions: The back-and-forth on tariffs has already caused volatility in global markets, highlighting the interconnectedness of trade and currency policies.
- Implications for Global Trade: The report signals that the US is prepared to take a strong stance against unfair currency practices, which could reshape trade dynamics moving forward.
What the papers say
According to Bloomberg, the Treasury's report did not label any country a currency manipulator but emphasized the need for vigilance against unfair practices. The South China Morning Post noted that the report comes as the Trump administration seeks to negotiate a trade deal with China, with Treasury Secretary Scott Bessent stating that macroeconomic policies leading to unbalanced trade will not be tolerated. AP News echoed these sentiments, highlighting the potential for future sanctions against China if manipulation is confirmed. This consensus among sources underscores the importance of the report in the context of ongoing trade negotiations and market stability.
How we got here
The Treasury's semiannual report is part of ongoing scrutiny of currency practices among major trading partners. Previous administrations have labeled China a currency manipulator, but recent diplomatic efforts have shifted the focus towards negotiations rather than sanctions.
Go deeper
- What are the implications of the Treasury's findings?
- How might this affect US-China trade relations?
- What actions could the US take against currency manipulation?
Common question
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What Does the US Treasury Report Say About Currency Manipulation?
The US Treasury's latest report raises concerns about potential currency manipulation by China, coinciding with renewed trade talks between the two nations. This situation has significant implications for US-China relations and global markets. Here are some common questions people have regarding this topic.
More on these topics
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China, officially the People's Republic of China, is a country in East Asia. It is the world's most populous country, with a population of around 1.4 billion in 2019.
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The Department of the Treasury is the national treasury of the federal government of the United States where it serves as an executive department. The department oversees the Bureau of Engraving and Printing, and the U.S.
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Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
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Xi Jinping is a Chinese politician serving as the general secretary of the Communist Party of China, president of the People's Republic of China, and chairman of the Central Military Commission.
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The United States of America, commonly known as the United States or America, is a country mostly located in central North America, between Canada and Mexico.