Taiwan Likely to Remain on U.S. Currency Practices Monitoring List

The U.S. Treasury reviews major trading partners every six months. Its thresholds include a goods and services trade surplus with the United States exceeding $15 billion, a current-account surplus above 3% of GDP and persistent, one-sided intervention in the foreign-exchange market over a 12-month period. Taiwan has exceeded the first two thresholds and is therefore likely to remain on the Monitoring List. Inclusion does not mean Taiwan has been designated a currency manipulator, but it will face closer scrutiny.

The latest assessment shows that Taiwan’s trade and current-account surpluses remain key U.S. concerns. Taiwan’s central bank said its communication channels with the U.S. Treasury are working smoothly. It will continue to moderate foreign-exchange volatility while avoiding the third red line: net foreign-currency purchases in at least eight months of a 12-month period, with total net purchases equal to 2% or more of GDP. The final list is still subject to confirmation in the Treasury’s next semiannual report.