Donald Trump administration officially investigates Vietnam’s ‘currency manipulation’

The United States opened an investigation accusing Vietnam of manipulating the currency, possibly creating a new trade war, just weeks before the US presidential election.

The announcement by the United States trade representative made on Friday night, in accordance with section 301 of the trade law issued in 1974, is the same process the United States uses to impose tariffs on Chinese products imported into the United States.

US Trade Representative Robert Lighthizer said that “unfair monetary behavior could harm American workers and companies that compete with Vietnamese products, which could be artificially discounted due to the devaluation of copper.” money”.

On the same Friday, the United States announced another separate investigation of Vietnam’s timber imports.

Mr. Robert Lighthizer explained that if there is “illegal use of wood in goods exported to the United States, it will harm the environment and it will be an injustice to American workers and businesses.”

In another development, also on October 2 in Hanoi, a press conference was held to announce the results of the 2020 Meeting of Finance Ministers and Governor of the Central Bank of ASEAN.

Here Mr. Le Minh Hung, Governor of the State Bank of Vietnam (SBV), did not speak about developments in the US.

But he did comment on foreign exchange policy and foreign exchange market intervention in the post-Covid-19 period.

Mr. Le Minh Hung told reporters: “The State Bank has never used and will never use a monetary policy tool such as the exchange rate to create an unfair competitive advantage in commercial and international transactions.”

In August 2020, the US Department of the Treasury said it determined that the Vietnamese currency was deliberately undervalued in 2019 by about 4.7% against the dollar.

According to the US At the time, in 2019, Vietnam net bought $ 22 billion of foreign exchange through the State Bank of Vietnam, reducing the price of the dong from 3.5% to 4.8%.

According to the United States Department of the Treasury, the purchase of USD from Vietnam brings the exchange rate of VND, which is at 1 USD, to 23,224 VND in 2019, to 1 USD for 24,314 VND.

This rate is approximately 1,090 dong lower than the level in line with the real exchange rate.

Prior to that, on January 14, 2020, the US Department of Finance issued the Report on “Macroeconomic and Foreign Exchange Policy of the Major Trading Partners of the United States.” In that report, the United States put Vietnam on the list of 10 countries that should be monitored.

Also in the May 2019 US report, for the first time, Vietnam became one of the nine countries on the Watch List due to meeting two criteria of bilateral trade surplus with the United States and balance surplus. . den.

The May 2019 report also indicated that a country on the watch list would continue to be monitored for the next two reporting periods.

When the United States released its January 2020 report, the State Bank of Vietnam said it would continue to coordinate with relevant ministries and agencies to discuss and work on issues of interest to the United States.