WASHINGTON — The U.S. Treasury Department said Tuesday it has put Japan, China and seven other countries on a list of trading partners whose currency practices merit close attention.
The department concluded, however, that no major U.S. trading partner is manipulating its currency to gain an unfair trade advantage.
Starting with this semiannual report to Congress, the department said it will widen its net to assess “external imbalances and one-sided intervention” in a larger number of trading partners.
The administration of U.S. President Donald Trump has put pressure on China and Japan to reduce their trade imbalances with the United States.
The United States has proposed that a provision preventing currency devaluations be included in trade agreements with China and Japan.
Trump put further pressure on Prime Minister Shinzo Abe to fix Japan’s “unbelievably large” trade surplus in talks held during Trump’s recent four-day visit, which ended Tuesday.
Japanese officials are against the idea of linking currency and trade policy, partly because it could affect the Bank of Japan’s monetary policy.
The report from the U.S. department said the seven other countries that warrant special attention with a place on the “monitoring list” are Germany, Ireland, Italy, Malaysia, Singapore, South Korea and Vietnam.
Of the countries on the list, Italy, Ireland, Malaysia, Singapore and Vietnam constitute new additions, while Switzerland and India were removed.
According to the report, the yen reached a 16-month high in March 2018, but has remained “near historically weak levels” on “a real effective basis” for the past five years.
Japan’s goods trade surplus with the United States sat at $68 billion in 2018, down $1 billion from the previous year. The department attributed this to an increase in U.S. exports to Japan, particularly of mineral fuels.
However, citing the International Monetary Fund’s projection of less than 1 percent annual growth for Japan in 2020-2024, the report stressed the need for labor market reforms to raise potential growth.
With reference to China’s record $419 billion goods trade surplus, the report urged Asia’s largest economy to make its currency practices more transparent, “aggressively address market-distorting forces” and pursue structural reform.
The report, usually released every April and October, comes a month late this year due to Treasury Secretary Steven Mnuchin focusing on negotiations with China, a U.S. Treasury official said.