Switzerland now under surveillance in turn

The United States announced Thursday that it has added Switzerland and Ireland to its watch list, which lists its major trading partners likely to manipulate their currencies or establish non-tariff trade barriers.

According to a semi-annual report by the Treasury Department, which reviews the macroeconomic and monetary policies of the United States' main trading partners, there have been no cases of currency exchange rate manipulation, which allows "the effective balance of payments to be adjusted" and thus gain an unfair competitive advantage.

But now nine countries, with the addition of Switzerland and Ireland, are on the list of trading partners "requiring special attention" because of their economic policy choices.

The list already includes countries such as Germany, South Korea, Japan and Singapore.

While Switzerland and Ireland do not present any monetary policy problems, as Ireland's monetary policy depends on the European Central Bank (ECB), the two countries appear on the list due to a current account surplus with the United States, which Washington considers excessive.

According to the report, Ireland's current account surplus reached 17.2% of its GDP, while Switzerland's was 5%. The current account covers all financial transactions between two countries, including trade, investments, and money transfers.

In Ireland's case, it is mainly a trade surplus with the United States, itself caused by the presence of the European headquarters of the main American pharmaceutical and technology groups.

Furthermore, while the Treasury believes that as things stand, China is not presented as a country that has manipulated its exchange rates, the world's second largest economy "stands out among our main partners for its lack of transparency regarding exchange rate practices and policies."

The report, which covers the last six months of the year, summarizes the assessment of the policies of the United States' main trading partners, which represent approximately 78% of American foreign trade in goods and services.

This text was submitted to Congress. It is published annually in June and November. To characterize manipulation, the Treasury looks at countries with large trade surpluses that intervene in the foreign exchange market to prevent their currencies from appreciating, which would make their exports less competitive. The size of their current account surplus is also observed.