The U.S. Treasury is considering whether to label China a "currency manipulator." Apparently, this designation would have certain effects under 22 U.S.C. 5304, 5305 and 286y . A 2005 Treasury report states that
Title 22 U.S.C. 5304 requires, inter alia, that the Secretary of the Treasury analyze on an annual basis the exchange rate policies of foreign countries, in consultation with the International Monetary Fund, and consider whether countries manipulate the rate of exchange between their currency and the United States dollar for purposes of preventing effective balance of payments adjustment or gaining unfair competitive advantage in international trade. Section 5304 further requires that: "If the Secretary considers that such manipulation is occurring with respect to countries that (1) have material global current account surpluses; and (2) have significant bilateral trade surpluses with the United States, the Secretary of the Treasury shall take action to initiate negotiations with such foreign countries on an expedited basis, in the International Monetary Fund or bilaterally, for the purpose of ensuring that such countries regularly and promptly adjust the rate of exchange between their currencies and the United States dollar to permit effective balance of payment adjustments and to eliminate the unfair advantage."
So, this provision is slightly similar to Section 301 of the Trade Act of 1974, and Super 301 and Special 301, and other U.S. domestic statutory provisions authorizing agencies to "operate" certain U.S. rights or to respond to other circumstances. Apparently, the designation of "currency manipulator" simply triggers negotiations to stop the manipulation.
