The U.S. Treasury Department did not identify China as a currency manipulator but kept the country on a monitoring list of economies that "merit close attention," citing "significant concerns" about the East Asian nation's exchange-rate practices.

The Treasury said that while China does not meet the standards to be designated as a currency manipulator at this time, it will "carefully monitor and review" the determination over the next six months, citing the country's "exceptionally large and growing" trade surplus with the U.S. and history of undervaluing the Chinese yuan against the dollar. China recorded a goods trade surplus with the U.S. of $419 billion in 2018, the largest among Washington's major trading partners.

"Over the course of 2018, the [yuan] depreciated 5.4% against the U.S. dollar, and just under 2% on a broad, trade-weighted basis. If maintained, this depreciation would likely exacerbate China's large bilateral trade surplus with the United States," the department said in its biannual report to Congress on economic and exchange rate policy, released May 28.

No country met the criteria to be labeled a currency manipulator, but the monitoring list expanded to nine countries due to the addition of Ireland, Italy, Malaysia, Singapore and Vietnam. Germany, Japan and South Korea remain on the list, while India and Switzerland have been removed.

The Treasury reviewed 21 economies for potential currency manipulation after changing its threshold for inspection to now include countries whose bilateral goods trade with the U.S. exceeds $40 billion annually. Previously, the department only reviewed the country's 12 largest trading partners.

The report came days after the Commerce Department proposed a rule change to impose countervailing duties on goods imported from countries that devalue their currency relative to the dollar.