US places 5 countries on trade monitoring list
The Treasury Department has placed five countries — China, Japan, Germany, South Korea and Taiwan — on a new monitoring list designed to pressure foreign governments to tackle large trade imbalances with the United States.
The action was disclosed in a report the administration sent to Congress on Friday. The report, which by law Congress must submit to Congress every six months, does not designate any nation as a currency manipulator. But Treasury did say it is employing new tools to more closely monitor actions of countries with which the United States is running large deficits.
Under criteria Congress established earlier this year, Treasury put the countries on a monitoring list that will trigger talks but no economic penalties. However, if the discussions fail, the countries could face a greater threat of sanctions in the future.
The legislation was part of an effort to toughen a 1988 law that requires Treasury to assess whether any U.S. trading partner is manipulating its currency to gain unfair trade advantages. The designation enables the United States to try to negotiate with the offending nation to reform its practices.
If those talks fail, the United States can seek to impose trade sanctions such as penalty tariffs, though those sanctions must win approval of the World Trade Organization.