TAIPEI (Reuters – Taiwan and America have mutually advantageous trade relations, especially in the technology sector, and they have “smooth communication channels” and plan to continue talking with each other about currency issues, Taiwan’s central bank stated on Saturday.

Taiwan along with Vietnam exceeded again the U.S. Treasury’s thresholds of possible currency manipulation under the 2015 trade law. But the U.S. Treasury resisted the urge to officially name them as manipulators.

Taiwan’s central banking responded by stating that trade surpluses with the United States were due to the China/U.S. tariff war. This has led to companies shifting production from China and high tech demand from U.S. customers during the COVID-19 Pandemic.

It stated that the expansion of trade surpluses with the United States does not have anything to do exchange rate factors.

Taiwan’s current account surplus was also affected by these same factors. Taiwanese businesses increased domestic investment and Taiwanese citizens were not able to travel or spend the same amount due to the pandemic.

The central bank stated that “for a long period, our country has maintained close and mutually advantageous bilateral trade relations with the United States, and have been important partners in technology supply chains.”

“Communication channels are open between the U.S. Treasury and the bank, and both sides will continue communicating on pertinent issues in the future based on good interaction.”

U.S. Treasury stated that it would work with Taiwan in order to create a plan “specifically to address the root causes of Taiwan’s currency overvaluation and excessive foreign surpluses”.

The Taiwanese dollar has risen more than 2.5% this year against the greenback, making it one of the most successful Asian currencies.

The case of Taiwan is complicated by geopolitical factors, such as increased military tensions with China and Taiwan’s role as an important exporter for semiconductors. They are necessary to alleviate a shortage in supply for U.S. producers.