The U.S. Treasury Department’s decision this week to label both Vietnam and Switzerland currency manipulators lacked precedent and raised plenty of eyebrows. Labeling even one country a manipulator is a rare and headline-grabbing event. Until now, the administration of U.S. President Donald Trump had named only one country, China, a currency manipulator—only to remove it later. Never had the Treasury designated two countries in one fell swoop.
You could be forgiven for having expected a more vigorous overhaul of U.S. policies on currency manipulation during the Trump administration. After all, in 2015, Trump vowed to name China a currency manipulator on his first day in the Oval Office. As president, he launched accusations of currency manipulation on Twitter. Decrying the United States’ trade deficits, he overhauled decades of official U.S. policy on trade. And if one’s goal is to reduce the overall trade deficit, the natural complement to trade policy becomes currency policy.
