Another grenade in trade wars
By Stephen Bartholomeusz
May 28, 2019 — 3.30pm
Late last week the US Commerce Secretary, Wilbur Ross, issued a press release foreshadowing the release of new rules that would allow the US to impose "countervailing duties" on countries that artificially lower the value of their currencies. That’s odd, given the US already has a long-established process for identifying currency manipulators.
Countervailing duties are effectively tariffs designed to neutralise the impact of export subsidies, so Ross is essentially threatening to add another layer to the Trump administration’s tariff-led trade wars ....
US Treasury produces biannual reports to Congress on developments in exchange rates to investigate whether or not a country is manipulating its currency. Its most recent report, issued in October last year, found that none of America’s major trading partners met the department’s criteria for being labelled a currency manipulator.
There are three legs to the test: the country has to have a $US20 billion-plus ($288 billion) trade surplus with the US; the surplus has to be at least 3 per cent of its gross domestic product; and there has to be persistent one-sided intervention in the currency markets over a 12-month period that totals at least 2 per cent of its GDP ...
https://www.smh.com.au/business/markets/trump-throws-another-grenade-in-trade-wars-this-time-everyone-is-a-target-20190528-p51rxi.html
Hey! Ya wanna play "Putin says"? Putin says, Impose some new tariffs or I'll have to release the tapes!