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IMF is caught between the US and China

US Commerce department just issued a proposal to slap tariffs on exporters to the US based on how cheap their home currency is. It’s not surprising that the examples in the proposals were focused squarely on China. The degree of currency cheapness will come from the International Monetary Fund (IMF), which allegedly indicates that the yuan was undervalued by 3%. The amount of tariffs spread around all Chinese companies would be equal to the total US trade deficit with China of $500bn times 3% = $15bn, give or take.
The IMF report in question was published in July of last year, and is due for an update this July. In a nutshell, the IMF converts total trade imbalance of a country (e.g. China) into the degree of currency undervaluation using cutting edge econometric machinery. With the US and China being the two most important members of the IMF, it will be interesting what the report will show this year.
My guess, US will be in for an unpleasant surprise. China current account surplus (the IMF measure of the overvaluation) shrunk from 1.6% in 2017 to 0.4% in 2018 — the report uses previous full year of data. Moreover, it is forecasted to fall to 0 or even deficit in the coming years. US Treasury may end up having to compensate Chinese companies for expensive yuan (only kidding).
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