On April 16, the U.S. Treasury Department determined in its semiannual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States that there is insufficient evidence to label Vietnam as a currency manipulator. In this Report, Treasury reviewed and assessed the policies of 20 major U.S. trading partners during the four quarters through December 2020.
The Report concluded that Vietnam continues to meet all three criteria for “enhanced analysis” under the Trade Facilitation and Trade Enforcement Act of 2015 (the 2015 Act) during the period under review. However, under the Omnibus Trade and Competitiveness Act of 1988 (the 1988 Act), Treasury does not have evidence that Vietnam manipulates its exchange rate for either of the purposes outlined in the 1988 Act. Nonetheless, consistent with the 1988 Act, Treasury will continue its enhanced engagements with Vietnam and assess global economic developments from the COVID-19 pandemic to better determine whether Vietnam intervened in currency markets in 2020 and violated either of the purposes under the 1988 Act.
“The US-ASEAN Business Council commends Treasury’s initial step to resolve its concerns with Vietnam today,” said Council Chairman, President & CEO Alexander Feldman. “We encourage the Biden-Harris Administration to continue working with Vietnam and other members of ASEAN to strengthen American diplomatic and economic engagement with the region. We hope the ongoing Section 301 Investigation into Vietnam’s currency practices will be successfully concluded in a way that enhances the environment to further strengthen the U.S. – Vietnam relationship.”
Mr. Feldman continued, “Now more than ever, our friends and competitors are concluding formal preferential market access trade agreements with growing markets in Asia like Vietnam, that put American based exporters of goods & services and workers at a competitive disadvantage. Therefore, it is imperative that the Biden-Harris Administration lean forward to open markets in Asia including Vietnam for American exports on a competitive basis. Strengthening our partnerships with trusted supplier countries including Vietnam will further bolster America’s competitiveness in the Indo-Pacific and support our economic recovery at home.”
Mr. Feldman, on behalf of the Council and its members, testified at the December 29, 2020 Office of the U.S. Trade Representative’s (USTR) hearing on Vietnam’s Currency Valuation and submitted associated written comments. In conducting its investigation, USTR has consulted with Treasury and cited the December 2020 edition of Treasury’s Foreign Exchange Report, in which Treasury first labelled Vietnam a currency manipulator. On January 15, USTR announced that it deferred the investigation to the Biden administration.