View all text of Subchapter VI [§ 4421 - § 4422]
§ 4421. Enhancement of engagement on currency exchange rate and economic policies with certain major trading partners of the United States
(a) Major trading partner report
(1) In general
(2) Elements
(A) In generalEach report submitted under paragraph (1) shall contain—
(i) for each country that is a major trading partner of the United States—(I) that country’s bilateral trade balance with the United States;(II) that country’s current account balance as a percentage of its gross domestic product;(III) the change in that country’s current account balance as a percentage of its gross domestic product during the 3-year period preceding the submission of the report;(IV) that country’s foreign exchange reserves as a percentage of its short-term debt; and(V) that country’s foreign exchange reserves as a percentage of its gross domestic product; and
(ii) an enhanced analysis of macroeconomic and exchange rate policies for each country that is a major trading partner of the United States that has—(I) a significant bilateral trade surplus with the United States;(II) a material current account surplus; and(III) engaged in persistent one-sided intervention in the foreign exchange market.
(B) Enhanced analysisEach enhanced analysis under subparagraph (A)(ii) shall include, for each country with respect to which an analysis is made under that subparagraph—
(i) a description of developments in the currency markets of that country, including, to the greatest extent feasible, developments with respect to currency interventions;
(ii) a description of trends in the real effective exchange rate of the currency of that country and in the degree of undervaluation of that currency;
(iii) an analysis of changes in the capital controls and trade restrictions of that country; and
(iv) patterns in the reserve accumulation of that country.
(3) Assessment factors
(b) Engagement on exchange rate and economic policies
(1) In generalThe President, through the Secretary, shall commence enhanced bilateral engagement with each country for which an enhanced analysis of macroeconomic and currency exchange rate policies is included in the report submitted under subsection (a), in order to, as appropriate—
(A) urge implementation of policies to address the causes of the undervaluation of its currency, its significant bilateral trade surplus with the United States, and its material current account surplus, including undervaluation and surpluses relating to exchange rate management;
(B) express the concern of the United States with respect to the adverse trade and economic effects of that undervaluation and those surpluses;
(C) advise that country of the ability of the President to take action under subsection (c); and/or
(D) develop a plan with specific actions to address that undervaluation and those surpluses.
(2) Waiver
(A) In generalThe Secretary may waive the requirement under paragraph (1) to commence enhanced bilateral engagement with a country if the Secretary determines that commencing enhanced bilateral engagement with the country—
(i) would have an adverse impact on the United States economy greater than the benefits of such action; or
(ii) would cause serious harm to the national security of the United States.
(B) Certification and report
(c) Remedial action
(1) In generalIf, on or after the date that is one year after the commencement of enhanced bilateral engagement by the President, through the Secretary, with respect to a country under subsection (b)(1), the Secretary determines that the country has failed to adopt appropriate policies to correct the undervaluation and surpluses described in subsection (b)(1)(A) with respect to that country, the President shall take one or more of the following actions:
(A) Prohibit the United States International Development Finance Corporation from approving any new financing (including any insurance, reinsurance, or guarantee) with respect to a project located in that country on and after such date.
(B) Except as provided in paragraph (3), and pursuant to paragraph (4), prohibit the Federal Government from procuring, or entering into any contract for the procurement of, goods or services from that country on and after such date.
(C) Instruct the United States Executive Director of the International Monetary Fund to call for additional rigorous surveillance of the macroeconomic and exchange rate policies of that country and, as appropriate, formal consultations on findings of currency manipulation.
(D) Instruct the United States Trade Representative to take into account, in consultation with the Secretary, in assessing whether to enter into a bilateral or regional trade agreement with that country or to initiate or participate in negotiations with respect to a bilateral or regional trade agreement with that country, the extent to which that country has failed to adopt appropriate policies to correct the undervaluation and surpluses described in subsection (b)(1)(A).
(2) Waiver
(A) In generalThe President may waive the requirement under paragraph (1) to take remedial action if the President determines that taking remedial action under paragraph (1) would—
(i) have an adverse impact on the United States economy greater than the benefits of taking remedial action; or
(ii) would cause serious harm to the national security of the United States.
(B) Certification and report
(3) Exception
(4) Consultations
(A) Office of Management and Budget
(B) Congress
(d) DefinitionsIn this section:
(1) Appropriate committees of CongressThe term “appropriate committees of Congress” means—
(A) the Committee on Banking, Housing, and Urban Affairs and the Committee on Finance of the Senate; and
(B) the Committee on Financial Services and the Committee on Ways and Means of the House of Representatives.
(2) Country
(3) Real effective exchange rate
(4) Secretary
(Pub. L. 114–125, title VII, § 701, Feb. 24, 2016, 130 Stat. 195; Pub. L. 115–254, div. F, title VI, § 1470(h), Oct. 5, 2018, 132 Stat. 3516.)