(Reuters) – The U.S. Treasury Department said Friday that it used broader measures of current and trade surpluses as well currency interventions to analyze the foreign exchange policies of U.S. trading partner countries.

Although the semi-annual report did not identify any U.S. trading partners as currency manipulators, it noted that Vietnam and Taiwan continue to surpass its thresholds to detect currency manipulation. It also found enhanced analysis according to a 2015 U.S. Trade Law. Two of the new criteria were triggered by Switzerland, but the other three would have been triggered under the old standard.

This is how Treasury’s new goals compare to its previous approach to analysis. It also includes a new method for determining countries that are eligible for review.

WHO REVIEWS?

According to the previous standard, all bilateral trading partners exceeding $40 billion of total trade in goods (i.e. the sum of exports and imports) with the United States were subject to review by the Treasury. This equation didn’t include services.

The new measure adds services because they play an increasing role in international commerce. Treasury has dropped the $40 billion trigger to instead look at top 20 U.S. trade partners every six months.

Treasury uses three methods to check if a country has been identified as a currency manipulator. Each country must be reviewed to confirm that it is.

* A “significant” bilateral trade surplus with the United States

* A “material” current account surplus

* Engaged in “persistent, one-sided intervention” in foreign exchange markets

Treasury will review any trading partner which has triggered the two preceding criteria. It can continue seeking remedies with any country dropping out of the top 20, if necessary.

WHAT ACTS AS A SIGNIFICANT TRADE SURPLUS?

Treasury considers that this threshold was triggered in the event of a country under review having a $15 billion or greater goods and service trade surplus with the United States.

The standard was previously a surplus of $20 billion for goods only.

WHAT Counts as a ‘MATERIAL CURRENT ACCOUNT SUPLUS?

This question has been re-examined by Treasury. It is more complicated than the others and is meant to allow Treasury to distinguish between surpluses in current accounts that it considers excessive and ones that are justified.

The country with a current account surplus of less than 2% would have been considered “material”.

Treasury now looks at the issue in two different ways. This threshold applies to countries with current accounts surpluses exceeding 3% of GDP. It also applies to countries running surpluses over 1% of GDP. Current account “gaps” are measures of the country’s actual balance in current accounts relative to Treasury’s “optimal”.

WHAT ACTS AS A ‘PERSISTENT, UNDERSTANDING’ FOREX INTERVENTION

Treasury’s definition of persistence is what has changed. Net foreign exchange purchases above 2% GDP still qualify. However, in order for them to be “persistent,” they have to occur over the eight months of the review period, as opposed six months ago.

Treasury will now zero in on truly “asymmetrical patterns”, rather than those that are caused by short-term external shocks, such as the COVID-19 pandemic.