The U.S. government has stayed its hand and not branded China a currency manipulator. That forbearance irritates advocates of an all-out assault on Chinese economic practices — U.S. President Donald Trump among them — but it reflects the reality of Beijing's policy, as well as that of other countries of concern, Japan among them. This respite may prove temporary, however: In six months, the United States will again assess its trade partners' currency policies and practices, and Washington's frustration at stubbornly high trade deficits may overcome economic logic.

The U.S. Treasury is required by law to provide reports to Congress every six months on international economic policies, including the exchange rate policies of its major trading partners. If a country meets three conditions — a significant (greater than $20 billion) persistent trade surplus; a persistent current account surplus that is greater than 3 percent of GDP; and persistent, repeated one-sided intervention in currency markets that exceeds 2 percent of GDP over a one-year period — then it can be labeled a currency manipulator. That allows the U.S. to commence trade negotiations to lower the trade deficit. Failure to reach agreement permits Washington to impose tariffs, subject to World Trade Organization approval. The U.S. last charged a country a currency manipulator in 1994: China was the offender.

Trump pledged on day one of his administration that he would declare China a currency manipulator. That would allow him to impose sanctions and end a practice that he claimed afforded Chinese companies an unfair advantage in business competition, costing Americans jobs and profits. After four successive Treasury reports, however, China has escaped the label.