politics

U.S. places Japan, 4 other countries on trade monitoring list

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By MARTIN CRUTSINGER

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Congress last year amended the law to set up specific criteria that the administration could use short of deeming a country >a currency manipulator.

Well then, the US can put ITSELF on the list of currency manipulators, since it manipulated the greenback with multiple QEs.

15 ( +20 / -6 )

Bottom line, even if one of the 5 countries is designated to be manipulating its currency in order to gain a a further trade advantage, under the plan, the WTO would have to agree with the USA before it could impose trade sanctions. This plan appears toothless and is only there to placate certain voting blocks and those with vested interest.

6 ( +6 / -0 )

GaijindesuApr. 30, 2016 - 06:40AM JST

Well then, the US can put ITSELF on the list of currency manipulators, since it manipulated the greenback with multiple QEs

.

Why do people come out with the same old rubbish?

The US introduced QE for the primary reason to keep the financial markets liquid. A secondary result of that was a weakening of the dollar.

The Japanese QE was never about ensuring the financial markets stayed fluid, that has never been a problem, the opposite is true, the market is flooded with too much cash. The primary reason for Japanese QE was to weaken the Yen and with the hopeful secondary result that Japanese exports would increase in volume and value.

This is really sweet coming from a country who already ran an astronomical current account surplus. So sweet that it borders on greed and 'blatant beggar thy neighbor' economic policies. The first time around, 2001 -2007, it worked for Japan because of China's growth and the easing of credit in the developed economic world. This time....well we:ve all seen where Abenomics is taking us!

Japan's problem is that it is addicted to government spending and the only way that government spending can be sustained is running current account surpluses. The only way that current account surplus can be sustained, especially as the Dankai generation use up their savings in their retirement, is through blatant currency manipulation of the Yen. Neo mercantilism at its best.

Yes Korea, Taiwan and China for now do likewise. And yes Germany hides behind a weakened currency, but none of them are practicing blatant currency manipulation/weakening the way Japan is and besides it doesn't make it right because someone is doing it.

-6 ( +10 / -16 )

Election year bs too....

6 ( +7 / -1 )

crap!

3 ( +4 / -1 )

danalawton

Bottom line, even if one of the 5 countries is designated to be manipulating its currency in order to gain a a further trade advantage, under the plan, the WTO would have to agree with the USA before it could impose trade sanctions. This plan appears toothless and is only there to placate certain voting blocks and those with vested interest.

Not really. The US can impose the sanctions and it will take at least 18 months for the WTO to make a decision on the sanctions.... 18 months of sanctions will sure make 4, except China, seek a speedier recourse to the problem than the WTO.

I say go USA, enough is enough with these economies who don't seem to realize that fiscal/monetary acts that were OK when their economies were developing are not acceptable now their economies have developed. It's such manipulative economic practices that have occasioned the possibility of a Trump White House in 2016.

I'm not American by the way.

-9 ( +6 / -15 )

No country manipulates currency and trade more than the U.S., and no country is deeper in dept. This is nothing more than an action to try and continue its grip on a world monopoly. I'm not denying that other countries don't engage in these practices, but the U.S. takes the cake by far.

The WTO needs to also look at the U.S. from the perspective of other countries, in regards to these "three criteria's".

6 ( +12 / -6 )

Again the sole intent of Japanese QE was to weaken the Yen. Obviously it has failed because Japan carries the burden of its current account surplus.

The sole intent of US QE was to save the domestic financial markets, a by product was the dollar weakened.

The only way Japan is now going to weaken its currency is if it forms a monetary union with Greece. As long as Japan runs a current account surplus it is burdened with a currency that is an attractive safe haven in times of world monetary instability.

When it loses that current account surplus, which it will do because it is only being maintained by the financial investments from the saving of the Dankai generation (most Japanese below 50 have hardly any savings) and they are spending it now in their retirement years, the Japanese Yen will be in freefall.

The US problems of the dollar are completely of a different nature. An unstable or weakened dollar, makes it unattractive as the world currency and that fact, the dollar as the fiscal franca, is the only way it can sustain its present debt and spending. It is not in the US political/fiscal interest to have a weakened unstable dollar.

If all things being equal, the US could run a healthy economy by domestic consumption alone. It is the only country in the world that could operate a successful siege economy. All the US is saying is that it wants to compete on an equal playing field which it quite clearly is not and these 5 are the leading perps of many who have made it so,

-5 ( +5 / -10 )

Gary Raynor, You're obviously an intelligent person, so please don't tell me you buy that U.S. Propaganda about Japan's QE being about weakening the yen more than liquidity. Abenomics, like it or lump it, is all about liquidity. Please drop believing that BS that American economists are feeding you - that stuff ain't good for you. Also, let's just see what happens when the States tries imposing sanctions on Japan, South Korea or Germany... Or China for that matter. This trade monitoring list is posturing, with empty diplomacy backing it. All pomp and no substance. What a joke.

2 ( +7 / -5 )

The trade deficit with Mexico is higher than South Korea and Taiwan. Why is it not on the list?

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mexico doesnt really manipulate its currency, its problem is corruption that is sustaing through remittances from abroad

This might be just what kicks Abenomics into gear, outside pressure. Once the BOJ stops playing around with chase the tail tricks and gimmicks and is forced by big brother to do something, they might start coming up with meaningful solutions instead of neg. interest rates etc

-3 ( +2 / -5 )

Torakichi

please don't tell me you buy that U.S. Propaganda about Japan's QE being about weakening the yen more than liquidity. Abenomics, like it or lump it, is all about liquidity.

Japan has not had a problem with the lack of liquidity since the banking crises of the mid-90s. As a matter of fact Japan has had the opposite problem... too much liquidity and companies and banks sitting on to too much cash.

Abenomics is and always has been, like I and others (Globalwatcher, SmithinJapan and Sangatsu) have being saying for 4 years, more of the same old LDP public spending on the chronically ill domestic economy (60%) sustained by currency manipulation increasing the corporate taxation of the export sector of the Japanese economy (40%) and supplemented by government borrowing through issuing bonds.

The only difference with Abenomics, and Globalwatcher noticed this, was that in 2011 when the government issued bonds, there were no takers for the bonds; no matter how strong armed the MOF got with the Japanese banks and Japanese insurance companies.

A crises was only averted, because the Japanese government then was faced with either one of 3 options - put the bonds out on the international markets and that would have led to a considerable rise in interest paid to the lenders, cut back government spending or make the Japanese banks and insurance companies take a haircut by defaulting on existing debt - but Abe gets elected and Kuroda joins the BOJ and voila the crises is kicked further down the road because the BOJ buys the JGBs.

Now the BOJ is the biggest holder of Japanese government debt (40%) and the leading shareholder in 25% of the companies listed on the Nikkei.

The only way now the crises of 2011 can be averted in 2017 is that government revenue increases remarkably through economic expansion or the Japanese can inflate / monetarize the existing debt away: both involve a considerable weakening of the Yen..... ergo sum currency manipulation.

-3 ( +5 / -8 )

As long the USA cold flood the global markets with cheep products globalisation was fine. Now the US lost the competitive edge to others and at once globalisations is not fine anymore and competitive countries are bad guys. The US has to face the ghost they called. How about decreasing the salary level to get more competitive ? Oh ah, blaming others is easier.

2 ( +7 / -5 )

The Treasury Department has placed five countries — China, Japan, Germany, South Korea and Taiwan — on a new >>monitoring list designed to pressure foreign governments to tackle large trade imbalances with the United States.

There is no doubt Japan is manipulating their own currency heavily through BOJ. Japan will not enjoy being put at the same level as China and SK. As Germany, are they accusing of manipulating the euro lol ?

If a country met all three criteria, the law requires the administration to engage in “enhanced analysis” of the country’s >>practices.

In a nutshell, engage into trade manipulation.

-1 ( +4 / -5 )

Citizen2012Apr. 30, 2016 - 10:28AM JST

Germany, are they accusing of manipulating the euro lol ?

No they are accused of extending the Greek financial crises by refusing to allow Greece to write off some of its debt. By this, the Euro crises will see no end and the Euro will remain weak and Germany practices currency manipulation by stealth.

If Germany had its own currency, it would be, because of Germany's current account surplus and fiscal health, valued at around 75% more than the existing Euro is, which is euro 114 to the US dollar

-5 ( +4 / -9 )

this is totally stupid and yet another sign of the insanity of the current US government led by the liberal cabal....just becasue the US overpays its workers, and sends its own industry and businesses overseas and then puts the entire economy in the red because of excessive wellfare payments to people who refuse to work..they think they can blame other countreis that DO work hard and earn it like Japan.

it is really nuts.

I am sorry, Japan, I appologize for our country which is pretty mislead right now.

2 ( +7 / -4 )

Gary Raynor, a typical we-can-do-no-wrong yankee. America is one of the biggest currency manipulator, and it doesn't matter how much you try to rename it as "quantitative easing", the world sees it for what it truly is. The US has had a habit of this, like back in the day with the Plaza Accord, where the US literally forces their friends and allies to sacrifice their own economies for the sake of the American economy. Japan was hit hard, and quite frankly, never recovered. Even Abenomics can't turn it around.The days are a bit different now though. America can only make a "naughty list" now as if that's going to scare the countries listed in it lmao. This whole thing just alienates America even more.

0 ( +6 / -6 )

Based on what I read in the comments to the JT article on the failed Australian submarine deal, I find it hard to believe that Japan could be running a trade surplus with any country. The bulk of the comments in that venue were to the effect that Japanese management and government are totally incompetent and couldn't sell water in a desert.

Perhaps someone can explain the apparent discrepancy between the views in that venue, which were not limited to military equipment, and the view of the American government that not only are Japanese companies selling stuff to Americans, they are selling far too much stuff to Americans.

-8 ( +2 / -10 )

Gary Raynor, There seems to b a convergence between our end arguments (Japan's weakening of the yen) and the means with which we've arrived. Can I ask you to simplify the argument for me by answering the following question, briefly: What makes you think the Japanese QE was about anything other Han liquidity, given what they were looking at with the Japan Post pension fund, and what is right and wrong about Japan being placed on unilateral monitoring list? You se m to think it's not a bad move on the U.s.'s part.

2 ( +5 / -3 )

America making lists when it's no they are no longer be able to take advantage of free trade, how ironic.

-3 ( +3 / -6 )

bullfighter: It is about these nations manipulating currencies in order to increase exports, not simply that they are 'selling too much'. Not surprised by your knee-jerk reaction, though. You're probably just angry Japan was included no a list with China and Korea and not made an exception. Probably think it's regrettable.

-4 ( +3 / -7 )

bullfighterApr. 30, 2016 - 12:06PM JST

Based on what I read in the comments to the JT article on the failed Australian submarine deal, I find it hard to believe that Japan could be running a trade surplus with any country. Perhaps someone can explain the apparent discrepancy between the views in that venue, which were not limited to military equipment, and the view of the American government that not only are Japanese companies selling stuff to Americans, they are selling far too much stuff to Americans.

Perhaps you can run off and look up the difference between a current account surplus and a trade surplus, then you might have a bit more understanding of what we are talking about.

Since the 03/11 quake, Japan has, except for a few months, run a trade deficit. Since 2000 Japan, except for 2 months, has always ran a current account surplus. The current account surplus will inevitably shrink unless Japan increases its trade surplus. When it becomes a pattern of running current account surpluses, then the Japanese Yen loses its safe haven status and all hell breaks loose

The only way it can improve that trade deficit is (a) start up all the nuclear power stations and this will be only temporary (b) depend on an IT based economy that sells parts to China and Korea, but that surplus is shrinking as China and Korea substitute Japanese manufactured parts with domestically manufactured parts (c) build an effective international service based economy but Japan's present English language skills and Japanese red tape effectively stifle this at birth (d) re-ignite the old 'domestically manufactured product that is exported for sales to foreign markets' model economy and stifling Japanese consumption of imports. Although that model is an impossibility to recreate for a number of factors (salaries and too many better rival international competitor), the LDP thinks it can by weakening the Yen.

Torakichi

Can I ask you to simplify the argument for me by answering the following question, briefly: What makes you think the Japanese QE was about anything other Han liquidity,

Sorry Torakichi, you lost me there. I don't see how China fits into the equation of Japanese QE?

-1 ( +5 / -6 )

The gloves are coming off, finally! America's elites are at last coming around to the realization that their globalist dreams count for nought unless they can enforce compliance on free riding elites elsewhere. And what better way to do this than by denying their exports unfettered access to the American market. The VW and Mitsubishi scandals, and now the surge in the value of the yen, are essentially metaphorical equivalents of the Samson Option, engineered shakedowns incontrovertibly sending a shot across the bows of these trade dependent behemoths; get with the program, or else! Who needs Trump anyway when his shadow is already working its magic.

-4 ( +3 / -7 )

Treasury put the countries on a monitoring list that will trigger talks but no economic penalties. LOL and how do they expect to penalise eg China, one theyll need to get the WTO on board, two whatever sanctions/tariffs they put on China Im sure China will retaliate by putting similar tariffs on American good sold/made in China. More toothless BS by the US the biggest trade and currency manipulator of them all

1 ( +2 / -1 )

The US did not complain a few years ago when the yen went to 76 per dollar. US companies could have made a killing in Japan. But did they? They did squat. Typical US companies. And how about making something Japanese want to buy.

1 ( +5 / -4 )

I think this is US's retaliation for Abe's visit to Russia.

-3 ( +3 / -5 )

What? the US is mad because Japanese people don't feel like buying Buicks? Americans don't even want to buy Buicks. And look at the streets in Japan. Mercedes Benz isn't complaining. Any country could improve. But Japan has been making more and more progress in opening their markets as the years go by- some even more open than in the USA. "Non tariff barriers?" More like sorry excuses.

0 ( +4 / -4 )

Scary thing is that US recently passed a bill that enable US off its debt from the country who US finds as a currency manipulator. US holds lots of Japan's US treasury as hostage.

0 ( +3 / -3 )

There should be no such things as trade agreements; if any one country wants something that another has it can arrange to purchase it without any obligation for the other to return-trade. That would avoid situations like Australia is now in with the latest trade agreement whereby we are obliged to buy certain pharmaceuticals from the US to the disadvantage of our own regional generic brands and the industries that manufacture them. Another example of politicians putting global concerns before those of the people they supposedly serve.

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Today's rate is 106 yen/$, strongest in one and half years.

0 ( +1 / -1 )

Scary thing is that US recently passed a bill that enables US off its debt from the country who US finds as a currency manipulator. US holds lots of Japan's US treasury as hostage. and so does China, what is the US going to do not repay those debts!? China/Japan could stop funding US cheap debt, their interest rates will rise and crash their economy. US struggles to pay just the interest on the Japanese / Chinese debt. China could easily say ok you wont repay well just tax/tariff all US companies manufacturing/doing business in China, it'll take the WTO 18months to make a decision who's wrong but the damage will be done. The US seems to forget that Japan/China especially China have equally damaging trade weapons at its disposal as the US does, most things American buy is made in China anyways

1 ( +2 / -1 )

@Gary Raynor: I do see you know what you are talking about. But it still seems rather onesided. Looking back in time the US has done massive currency manipulations through the years. But that's not all, if you look at the TPP, and the bill that enable US off its debt from any country who US finds as a currency manipulator, you will start understanding what's going on. As a former company owner in Denmark selling to the US it's really clear, even the Danish government has been talking about the US manipulations, but it's very hush hush...

4 ( +4 / -0 )

All the US is saying is that it wants to compete on an equal playing field which it quite clearly is not and these 5 are the leading perps of many who have made it so, what a pile of doo doo, the US just want the illusion of an equal playing field in which they have an advantage. The US is the biggest trade and currency manipulator of them all, they're just the best at doing it stealthily.

-1 ( +1 / -2 )

The US is the biggest trade and currency manipulator of them all, they're just the best at doing it stealthily.

no stealthily. It's just that the other countries are enduring US's double standard.

-2 ( +1 / -3 )

Japan's consumer electronics sector is being destroyed by the cheap and high quality imports and the J. govt. is not doing anything about it. Has anyone bought a portable device made by Sony or Panasonic these recent years? No? I got me a nice shiney Chinese Huawei in Japan. Japan is a very free market- to the point of letting their companies transform or die.

"And how about making something Japanese want to buy." And they will want to buy it. When the first model iPhone came out it was not available in Japan at that time. Some Japanese people wanted one so badly they flew to the US to get one.

So why is Japan still such a powerful exporter? The simple answer is they are very strong with high grade industrial goods (so far China isn't- yet). Airplane wings (Toray), Ship engine parts (Kobe Steel). Only made in Japan. Companies and components like that which really make the world go around and are truly indispensable, which also make the importance of a smartphone look trivial. I guess if Huawei were to suddenly disappear I would simply get an ASUS smartphone. But if Toray were to disappear it would really disrupt the global airplane supply line and have a real negative impact on the world economy.

-1 ( +1 / -2 )

Anders Blenstrup-PedersenApr. 30, 2016 - 06:20PM JST

@Gary Raynor: I do see you know what you are talking about. But it still seems rather onesided. Looking back in time the US has done massive currency manipulations through the years.

Of course you are right... but in the kingdom of the blind, the one-eyed man is king.

-2 ( +2 / -4 )

Of course you are right... but in the kingdom of the blind, the one-eyed man is king. and that perfectly sums up the US, perfectly fine with having one eye as long as everybody else is blind.

1 ( +1 / -0 )

OK when Germany and Japan were 10% of world trade and they were developing their economies, but when they make up 40% of world trade it becomes a little like a Frankenstein monster with its trade distortions.

it sounds like you are just bringing up bitterness you have from WW2

But for Japan/Germany is it just they work harder or smarter somehow? I personally don't see the big problem. If Germany is working their butts off from paranoia and lack of complacency then good on them. They don't depend on that stupid American exceptionalism belief that Sarah Palin likes to mention repeatedly. They work and produce stuff - simple. What is evil about it? Both Germany and Japan produce heavy industry that is indispensable for the world to operate- and not trivial hand held devices. Also, Japan is slowly transforming into any economy with with more service and less manufacturing like the US's, anyway. For Germany's size they export more high end goods than the US to China for China's future infrastructure. These two developed and competitive countries that you have deep hatred for are very important for the rest of the world to develop and modernize.

0 ( +1 / -1 )

parasitic economic models of neo mercantilism

What action for instance? Japan is the only 4th trading partner of US after China, Canada, Mexico. Japan is suffering from huge trade deficit. The export dependency is only 11.4% of GDP.

-1 ( +1 / -2 )

nishikat.

These two developed and competitive countries that you have deep hatred for are very important for the rest of the world to develop and modernize.

Japan competitive? Give me a break. Have you ever been to Japan?

-1 ( +4 / -5 )

Yes, I live here. They are very competitive. I just gave concrete examples of why Japan heavy industry is important for the rest of the world and how the rest of the world would suffer without them if they were suddenly gone. A great number of industrial products are made only in Japan.

Again, you have deep hatred for Japan for whatever reason it may be. Feel free to hate all you like. If you hate something then you will naturally think that everything about it sucks as you mention that Japan is parasitic.

Question, since you seem to know so much about Japan's currency manipulation what would a fair exchange be to the dollar for the long term? Please enlighten us.

0 ( +3 / -3 )

Japan competitive? Give me a break. Have you ever been to Japan?

Then US really should stop bullying Japan for once. Japan is very tired of being bullied by US.

-4 ( +2 / -6 )

Japan is very tired of being bullied by US.

And america is so tired of protecting you guys. Its been 70 yrs. When will Japan get its "sovereign" act together??

China is doing alright-

0 ( +3 / -3 )

Wc626, then please vote for Trump. He seems to be concerned about American people not wall street.

-4 ( +1 / -5 )

Japanese government's addiction to spending LOL US is pretty addicted too last time I checked, and how is the US going to nudge Germany down this so-called right path!? Germany hides behind the weakness of the Euro, Is the US going to sanction the whole EU to get its way. and what China is the US going to have a trade war with the Chinese to get its way!? No the US can huff and puff all it likes if they were so against currency manipulation they would have banned it decades ago. certainly can't have something banned that the US itself has found so useful in the past to make itself competitive.

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An interesting action by the USA. The actual legitimate actions of any government is fair trade but this has nothing to do with imaginary concepts like trade deficit. All countries,should be open for trade and have similar considerations for economic freedoms and cultural concepts. For example, the USA should not do business in countries with slavery or no protection for some level of personal wealth protection. Even currency manipulation is a legitimate issue but the response should be cut off trade entirely.

But trade deficits are not real. Assuming it is trade. If I buy an iPhone in Los Angeles, made in China, yes the retailer bought it from China, sending China cash, but the actual value is the iPhone. The USA

0 ( +1 / -1 )

This is all coming from Donald Trump and the GOP party. Why? Because it's an election year and he who has the most carrier groups wins. And as much as you may hate him, Mr. Trump may become the next POTUS. Likewise, Hillary may go to prison but if not her vote will be split between Bernie Sanders' upcoming independent POTUS campaign and Clinton's Democratic run. Which could give Sanders or Trump the Oval Office but it will not be Clinton. No way.

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Wc626APR. 30, 2016 - 11:46PM JST

america isn't 'protecting' japan, the defence against asian continent powers is a common interest.

japan is re adjusting to a world where america lost the grip but things like this don't happen overnight

0 ( +1 / -1 )

I think we should get together with the other countries on the list and make our own economic zone. Well, that will happen when Trump becomes president. And US, you won'd have us to push around any more!

-1 ( +0 / -1 )

tinawatanabe: "Then US really should stop bullying Japan for once. Japan is very tired of being bullied by US."

I thought you said you don't speak for the Japanese people, and that you don't care what others think. Oops on both, I guess. But then, you claim EVERYONE is bullying Japan, whom you think is the victim of everything as well. Go figure. In any case, the US is free to make it's own list if it chooses, and punish those it deems fit. If you truly don't care and it doesn't affect you, don't worry about it. If you do care, don't invite the punishment through currency manipulation like Japan did when they intentionally deflated the yen (then denied it, and even threatened China not to do the same!). And if and when Japan does it anyway, don't cry about being bullied when you don't like the result.

0 ( +0 / -0 )

Many countries base their economies on exports to America

-1 ( +0 / -1 )

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