The United States has designated Switzerland and Vietnam as currency manipulators for allegedly meddling in foreign exchange markets, sparking disputes with two trading partners.
The countries were labeled as such Wednesday in a U.S. Treasury Department annual report aimed at stopping countries from manipulating their currencies to achieve unfair trade advantages.
It is the first time the U.S. has branded another country as a currency manipulator since August 2019, when China was given the label while engaged in tense trade talks with the U.S.
Washington dropped the designation in January after the two countries reached trade agreements, but Beijing’s yuan has remained on the Treasury Department’s list of currencies it is watching.
The report said Switzerland and Vietnam were the only countries that met all three criteria for being labeled a currency manipulator, a move that leads to negotiations over the next year. If agreements are not reached, the U.S. can impose economic sanctions on the two countries.
Other countries on the watchlist are India, Italy, Korea, Japan, South Korea, Germany, Singapore, Malaysia, Taiwan and Thailand.
The report is the last one the Trump administration will produce, leaving it to President-elect Joe Biden’s treasury secretary to decide whether to maintain the designations.
But a senior Treasury official said that Biden’s nominee, Janet Yellen, had not yet been informed of the designations and that the decisions rest with the Trump administration, according to The New York Times.
The report, which covers market activity from July 2019 to June 2020, was released during a coronavirus pandemic that has weakened the global economy this year and triggered volatility in foreign exchange markets.