Amid growing trade tension between China and the United States, the Trump administration has again declined to label China a currency manipulator.

The US Treasury Department, in its semi-annual report to the Congress, found none of the six major US trading partners placed under monitoring – China, Germany, Japan, South Korea, Switzerland and India -- was manipulating its currency. India is new to the Treasury list.

“We will continue to monitor and combat unfair currency practices, while encouraging policies and reforms to address large trade imbalances,” US Treasury Secretary Steven Mnuchin said in a statement on Friday.

It was the third such Treasury report issued by the Trump administration since taking office about 15 months ago. None of the reports labeled China a currency manipulator, contrary to President Donald Trump’s rhetoric on the campaign trail during the 2016 election when he repeatedly bashed China as a currency manipulator.

The Treasury report, titled Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States, said China has an “extremely large and persistent” bilateral trade surplus with the US, with goods trade surplus standing at $375 billion in 2017. But it noted that China runs trade deficit with many other economies.

China’s current account surplus expanded in nominal terms to $96 billion, or 1.4 percent of the GDP, in the second half of 2017 from $90 billion, or 1.5 percent in the second half of 2016. “But it remains significantly below its 2007 half year peak over 10 percent of GDP,” said the Treasury report.

The last time the US Treasury labeled a country a currency manipulator was in 1994 when China was named.

The Treasury report also noted that since the beginning of 2018, the Chinese currency yuan, also known as RMB or renminbi, has continued to strengthen against the dollar, up 3.7 percent as of the end of March.

Speculation was rife last week that China may depreciate its currency in case the Trump administration imposes punitive Section 301 tariffs on some $150 billion imports from China following an investigation into China’s intellectual property policies and practices.

Yi Gang, governor of the People’s Bank of China, the central bank, said on March 11 that China had no intention of manipulating its exchange rate to try to boost trade.

“Our exchange rate system is demand and supply determined … basically, the central bank has not had an intervention for a long time and this serves the Chinese people well,” said Yi, who assumed the current post last month.

Yi is expected to be in Washington in the coming days for the 2018 IMF/World Bank Annual Spring Meeting. It’s unknown if he is scheduled to meet Mnuchin and other senior US officials over the current trade tension between the world’s two largest economies.

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