US Treasury Calls Out China for Lack of Transparency on Yuan
(Bloomberg) — China stands out among US trading partners for its “relative lack of transparency” around currency management, the Treasury Department said in a semiannual foreign-exchange report released Thursday.
The US left its “monitoring list” for foreign-exchange practices unchanged, with 10 countries listed, and stopped short of labeling any major trade partner as a currency manipulator.
Trading partners that meet two of three criteria under a 2015 law get assigned to a list of economies that merit close monitoring by the Treasury for their exchange-rate practices. That list includes China, Japan, South Korea, Taiwan, Singapore, Thailand, Vietnam, Germany, Ireland and Switzerland.
“Treasury is committed to aggressively and vigilantly monitoring and combatting unfair currency practices,” Treasury Secretary Scott Bessent said in a statement accompanying the report.
The Trump administration’s main policy tool for addressing perceived unfairness in trade has been tariffs, rather than efforts to get other nations to boost their exchange rates. That approach, at least with regard to China, has come under scrutiny. A bipartisan duo of US senators recently called for the Treasury to consider a “formal finding of manipulation” by China — which the department has now declined to do.
Rick Scott, a Florida Republican, and Elizabeth Warren, a Massachusetts Democrat, in a June 17 letter to urged him to coordinate with the Group of Seven in pressuring China over “deliberately suppressing the value of its currency.”
The Treasury did warn that China could be designated a manipulator “if available evidence suggests that it is intervening through formal or informal channels to resist RMB appreciation in the future.” RMB stands for renminbi, the official name for China’s currency.
The International Monetary Fund has been among those calculating that the yuan is undervalued — which helps boost the price competitiveness of Chinese goods on international markets. German Chancellor Friedrich Merz in recent weeks has called for efforts to address a cheap yuan, marking a notable shift in Europe’s biggest economy.
Thursday’s report covers the four quarters through December 2025. The dollar slumped sharply in the first half of 2025 amid concern about President Donald Trump’s steep tariff hikes and the impact they’d have on foreign demand for American assets, as well as the US growth outlook.
The greenback has since stabilized, buoyed by a resilient US economy and still-elevated inflation, which has fueled bets the Federal Reserve will increase interest rates later this year. A number of US trading partners’ currencies have come under pressure, including the yen. Japanese authorities appear to have sold US Treasuries in their efforts to intervene and prop up their currency, data showed June 5.
Declines in the yen over multiple years through April 2026 have “resulted in substantial yen undervaluation,” the Treasury said. “Yen weakness has persisted despite a narrowing of US-Japan interest rate differentials,” the department said — alluding to the Bank of Japan raising rates in 2025 as the Fed cut.
“While global factors such as financial market volatility and oil prices have likely affected the yen, excess volatility in the yen is undesirable,” the Treasury said. “Monetary policy normalization would help anchor inflation expectations and reduce excessive exchange rate volatility.”
The US said three economies — Singapore, Switzerland and Thailand — could be removed from the currency monitoring list in the next reporting period if they met only one or no criteria during that timeframe.
–With assistance from Daniel Flatley and Greg Ritchie.
(Updates with more from report and additional context, starting in third paragraph.)
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