The US has kept Taiwan on its latest list of countries to monitor for possible currency manipulation in a semi-annual report titled Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States.
Taiwan is among 10 US trading partners that have been kept on the currency manipulation monitoring list, emphasizing that their “currency practices and macroeconomic policies merit close attention,” the US Department of the Treasury said in a statement yesterday.
The other nine on the list are China, Japan, South Korea, Thailand, Singapore, Vietnam, Germany, Ireland and Switzerland, the department said.
Photo: I-Hwa Cheng, AFP
The 10 countries were also included on the monitoring list in the January report.
The report uses three criteria to determine if any of the US’ trading partners should be named as a currency manipulator. The criteria are: having a trade surplus with the US of at least US$15 billion; having a current account surplus of at least 3 percent of GDP; and persistent intervention in the foreign exchange market, shown by net purchases of foreign currency of at least 2 percent of GDP.
When an economy meets only one of the three criteria for two US currency reports in a row, it is removed from the monitoring list. However, if a country meets all three criteria, it can be tagged as a currency manipulator.
In this month’s report, the department said it found no major trading partner met all three criteria for enhanced analysis under the Trade Facilitation and Trade Enforcement Act of 2015 during the four quarters ending December last year.
Taiwan met two of the three indicators: a trade surplus with the US and a current account surplus, the report said.
Taiwan’s extremely large current account surplus increased further during the report period, driven primarily by strong global demand for technology products, as did its bilateral trade surplus with the US, the department said.
Taiwan’s current account surplus grew to 19.6 percent of GDP last year, up from 14.1 percent in 2024, while its goods and services surplus with the US almost doubled last year, increasing by US$72 billion to US$145 billion, the report said.
Regarding market intervention, Taiwan fell just short of the currency manipulation factor, reporting net purchases of foreign exchange of US$7.7 billion last year, about 0.8 percent of its GDP, the report said.
Taiwan’s official disclosures on its foreign exchange net purchases were “broadly consistent with Treasury estimates,” it said.
Looking more closely at Taiwan’s currency practices, the report said the central bank’s intervention was largely aimed at easing the rapid appreciation of the New Taiwan dollar against the US dollar.
However, the central bank also engaged in smaller net sales of the greenback in some months to reduce upward pressure on the US unit last year, the report added.
