The U.S. Treasury Department has expanded its currency practices watchlist to include Ireland and Switzerland, joining seven other trading partners already under scrutiny. This decision reflects growing concerns about currency manipulation and macroeconomic policies that could potentially harm American economic interests and trade relationships.
Expanded currency watchlist: new additions and ongoing concerns
In its latest report released on June 6, 2025, the U.S. Treasury Department added Ireland and Switzerland to its currency practices watchlist. These two countries join China, Japan, South Korea, Taiwan, Singapore, Vietnam, and Germany, all of which were maintained from the previous report issued in November. The watchlist targets trading partners whose monetary practices and macroeconomic policies warrant closer monitoring.
Treasury Secretary Scott Bessent emphasized that the administration will monitor and take action against currency manipulation while closely tracking macroeconomic and financial policies implemented by trading partners. The primary concern is identifying policies that “propagate imbalances, contribute to significant exchange rate misalignments, or result in unfair competitive advantage in trade.”
The criteria for inclusion on this watchlist typically include:
- Significant bilateral trade surplus with the United States
- Substantial current account surplus
- Persistent one-sided intervention in foreign exchange markets
- Lack of transparency in currency practices
While China has not been formally designated as a currency manipulator, the Treasury report specifically highlighted concerns about Beijing’s lack of transparency regarding its exchange rate policies and practices. This opacity, according to American officials, distinguishes China from other major economies and justifies particularly close monitoring.
China’s special status in the Treasury’s monitoring framework
Despite avoiding the formal designation as a currency manipulator amid pressure from renminbi depreciation, China remains a focal point of the Treasury’s report. The document explicitly warns that China’s lack of transparency will not prevent designation if available evidence suggests formal or informal intervention to resist renminbi appreciation in the future.
China’s position is particularly delicate as it does not publish information about its foreign exchange market interventions. This lack of disclosure regarding key features of its exchange rate mechanism continues to make China an outlier among major economies in the eyes of U.S. officials.
The following table illustrates the key concerns regarding each country on the watchlist:
| Country | Primary Concerns |
|---|---|
| China | Lack of transparency, potential intervention to resist currency appreciation |
| Japan, Korea, Taiwan, Germany, Ireland, Switzerland | Significant bilateral surplus, substantial current account surplus |
| Singapore | Persistent one-sided currency intervention, substantial current account surplus |
| Vietnam | Bilateral surplus, current account surplus |
Trade deficits and the administration’s economic strategy
The Treasury report explicitly connects currency practices and trade imbalances, stating that unfair trade practices abroad have contributed to the U.S. trade deficit and harmed manufacturing employment for decades. The current administration has made it clear it will no longer accept persistent trade deficits with major partners.
According to the report, the leadership of President Trump has already begun to influence the policies of some trading partners in ways that could potentially reverse these deficits. This represents a continuation of the administration’s focus on addressing what it perceives as imbalanced trade relationships.
The approach to managing these concerns follows a systematic process:
- Identification of countries with concerning practices
- Placement on the formal watchlist for enhanced monitoring
- Bilateral engagement to address specific issues
- Potential escalation to formal designation if concerns persist
- Implementation of remedial measures when warranted
This methodical strategy underscores the administration’s commitment to proactive trade policy aimed at protecting American economic interests while encouraging more balanced global trading relationships.
Global economic implications of the Treasury’s vigilance
The expansion of the currency watchlist signals a heightened focus on currency and trade issues that could shape international economic relations in significant ways. For countries like Ireland and Switzerland, newly added to the list, this development brings increased scrutiny of their economic policies and potential pressure to adjust practices perceived as problematic by U.S. authorities.
The Treasury’s stance reflects broader concerns about how currency practices can create competitive advantages in international trade. When a country’s currency is artificially undervalued, its exports become relatively cheaper in global markets, potentially giving its producers an edge over American competitors.
For multinational corporations and investors, these developments highlight the importance of monitoring currency-related policy actions that could affect international trade flows and investment returns. Exchange rate movements influenced by policy decisions can significantly impact profit margins for companies engaged in cross-border business.
Financial markets will likely pay close attention to how this increased vigilance affects diplomatic relations between the United States and the countries on its watchlist, particularly as trade tensions remain a significant factor in global economic uncertainty. The potential for escalation in trade disputes represents a notable risk factor for global growth prospects.
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