According to a report by CNA, the US Treasury Department released its semiannual currency report stating that in 2025 no major trading partner gained an unfair competitive advantage through currency manipulation. However, the same report kept Taiwan, China, Japan and seven other major trading partners on a "monitoring list" for close scrutiny of their exchange rate practices.
CNA reports that 10 economies were placed on the Treasury's monitoring list: China, Japan, South Korea, Taiwan, Thailand, Singapore, Vietnam, Germany, Ireland and Switzerland. Per the same CNA report, all of these economies also appeared on the watch list in the January report, meaning the roster is unchanged between the two most recent reports.
CNA cites the US Treasury as saying that an economy is placed on the watch list if it meets two of three criteria set out under the 2015 Trade Facilitation and Trade Enforcement Act: a significant bilateral trade surplus with the United States, a material current account surplus, and persistent one-sided intervention in the foreign exchange market.
According to CNA's report, the Treasury said Thailand, Singapore and Switzerland each currently meet only one of the three criteria. The Treasury indicated that if these economies continue to meet fewer than two criteria in the next report, they will be removed from the watch list.
CNA reports that, starting this year, the Treasury has broadened its monitoring scope. It is now assessing more widely whether economies that choose to smooth currency volatility are also resisting depreciation in the same manner they resist appreciation.
According to a report by TechNews, Taiwan remained on the watch list because it triggered two of the three criteria: a high trade surplus with the United States and a current account surplus-to-GDP ratio above 3%. TechNews further reports that the assessment period covered all of 2025 and applied three specific thresholds: a bilateral goods-and-services trade surplus with the US exceeding US$15 billion; a current account surplus-to-GDP ratio exceeding 3%; and persistent one-sided FX intervention, defined as net purchases equal to at least 2% of GDP with net buying in at least 8 of 12 months.
According to TechNews, Taiwan's 2025 data show it clearing the first two thresholds by wide margins, while falling short of the third. The gap between the FX-intervention threshold and Taiwan's actual figure is the reason Taiwan avoided a third trigger.
| Indicator | Threshold | Taiwan's 2025 Figure | Threshold Triggered? |
|---|---|---|---|
| Trade surplus with the US (goods & services) | > US$15 billion | US$145 billion | Yes |
| Current account surplus / GDP | > 3% | 19.5% | Yes |
| Net FX purchases | ≥ 2% of GDP, net buying ≥8 of 12 months | US$7.7 billion (0.8% of GDP) | No |
As the table shows, Taiwan's trade surplus with the US was nearly ten times the US$15 billion threshold, and its current account surplus ratio was more than six times the 3% trigger point, while its FX net-purchase ratio of 0.8% of GDP remained well under the 2% bar cited by the Treasury.
According to TechNews, a press release from the Central Bank of the Republic of China (Taiwan) stated that communication channels between the central bank and the US Treasury have remained smooth, and that both sides will continue exchanging views on macroeconomic and currency policy on the basis of this ongoing dialogue. The same TechNews report cites the Treasury's own explanation, quoted in the central bank's release: Taiwan's long-standing current account surplus stems from a high domestic savings rate, which in turn is attributed mainly to an aging population structure and comparatively strict fiscal discipline. The Treasury further noted that investment income generated by Taiwan's large net external assets also contributes to the current account surplus.
According to TechNews, the Treasury reported that Taiwan's foreign direct investment (FDI) net outflows expanded to US$34 billion in 2025, up from US$21 billion in 2024 and nearly double the US$18 billion recorded in 2023. TechNews further reports that net outflows in the second quarter of 2025 alone reached US$16 billion, a record high, which the Treasury linked to leading Taiwanese firms diversifying production to the United States, Europe and Japan amid global supply chain restructuring. Separately, TechNews reports the Treasury's account that Taiwan's central bank intervention in 2025 was driven mainly by strong appreciation pressure on the New Taiwan Dollar, particularly during what was described as an "epic appreciation" in May 2025, with smaller-scale net FX selling recorded in other months of the year.
| Year | Taiwan FDI Net Outflow |
|---|---|
| 2023 | US$18 billion |
| 2024 | US$21 billion |
| 2025 | US$34 billion |
| Q2 2025 (single quarter) | US$16 billion (record high) |
The evidence assembled from CNA and TechNews reporting shows a consistent picture: Taiwan's headline numbers — a US$145 billion trade surplus with the US and a 19.5% current-account-to-GDP ratio — clear the Treasury's two quantitative thresholds by wide margins, which explains why Taiwan stayed on the watch list even though its FX intervention, at 0.8% of GDP, stayed well below the 2% trigger. At the same time, the Treasury's own explanation for the current account surplus — high savings tied to an aging population and fiscal discipline, plus investment income from net external assets — sits alongside the central bank's description of "smooth" bilateral communication, suggesting the two sides are not in open dispute over the diagnosis even as Taiwan remains formally listed. The rising FDI net outflows, reaching a record US$16 billion in a single quarter of 2025, and the central bank's heavier intervention during the May 2025 appreciation episode, point to two different pressures — capital moving out through corporate diversification and capital pressure pushing the currency up — occurring within the same year covered by the report.
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