Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Treasury Secretary Steven Mnuchin. Photo: Alex Wong/Getty Images

Switzerland and Vietnam have officially been designated as currency manipulators, the Treasury Department announced today.

Why it matters: The designation allows the White House to impose a broad range of tariffs, sanctions and other punishments on the two friendly countries, both of whom have been struggling with strengthening currencies this year.

  • The Swiss franc is a classic "flight-to-quality" currency, bought in times of global crisis and uncertainty. When that happens, Swiss exporters suffer, and the domestic inflation rate risks turning negative. So the central bank has intervened in currency markets to slow the strengthening of the currency.
  • Vietnam has been the primary beneficiary of the U.S. trade war with China. Global manufacturers who don't want to have all their eggs in the China basket have been moving some of their operations to Vietnam, which carries much less geopolitical risk. The increase in Vietnamese exports has strengthened the currency, and the central bank has tried to keep that strengthening under control.

The big picture: The "currency manipulator" label is rarely used. Until now it has only been applied to China (in 2019 and between 1992 and 1994), as well as Japan and Taiwan in the late 1980s.

Between the lines: While most U.S. administrations pay lip service to the idea that a strong dollar is in the national interest, Trump has aggressively taken the other side, seeking a weaker dollar — which means he wants other countries' currencies to be stronger. Even though the Swiss and Vietnamese currencies have been strengthening, he doesn't think they've been strengthening enough.

The bottom line: The designation will likely have limited practical consequence between now and Jan. 21, at which point a friendlier and more multilateralist Biden administration could try to salve any hurt feelings from this move.

Go deeper

Dan Primack, author of Pro Rata
Dec 17, 2020 - Podcasts

Behind the Bitcoin boom

Bitcoin yesterday topped $20,000 for the first time ever, and then just kept climbing.

Axios Re:Cap digs into the reasons for Bitcoin's price surge, and what it means for its future as an actual currency, with investor and podcast host Anthony Pompliano.

Stalemate over filibuster freezes Congress

Illustration: Sarah Grillo/Axios

Senate Majority Leader Chuck Schumer and Mitch McConnell's inability to quickly strike a deal on a power-sharing agreement in the new 50-50 Congress is slowing down everything from the confirmation of President Biden's nominees to Donald Trump's impeachment trial.

Why it matters: Whatever final stance Schumer takes on the stalemate, which largely comes down to Democrats wanting to use the legislative filibuster as leverage over Republicans, will be a signal of the level of hardball we should expect Democrats to play with Republicans in the new Senate.

Dave Lawler, author of World
1 hour ago - World

Biden opts for five-year extension of New START nuclear treaty with Russia

Putin at a military parade. Photo: Valya Egorshin/NurPhoto via Getty

President Biden will seek a five-year extension of the New START nuclear arms control pact with Russia before it expires on Feb. 5, senior officials told the Washington Post.

Why it matters: The 2010 treaty is the last remaining constraint on the arsenals of the world's two nuclear superpowers, limiting the number of deployed nuclear warheads and the bombers, missiles and submarines which can deliver them.