US Dept. of Treasury Report to Congress (Nov. 2022): Macroeconomic and Foreign Exchange Policies of Major Trading Partner of the United States

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Excerpt on Vietnam

Treasury Conclusions Related to the 2015 Act

Vietnam has been removed from the Monitoring List, having only met one of the three criteria over the four quarters through June 2022 as it had in the June 2022 Report for the four quarters through December 2021. Vietnam had previously exceeded the thresholds for all three criteria as noted in the December 2021, April 2021, and December 2020 Reports, in each of which Treasury conducted enhanced analysis of Vietnam. In early 2021, Treasury commenced enhanced bilateral engagement with Vietnam in accordance with the 2015 Act. As a result of discussions through the enhanced engagement process, Treasury and the State Bank of Vietnam- (SBV) reached agreement in July 2021 to address Treasury’s concerns about Vietnam’s currency practices.5 Treasury continues to engage closely with the SBV to monitor Vietnam’s progress in addressing Treasury’s concerns and remains satisfied with the progress made by Vietnam.

Treasury Analysis under the 1988 and 2015 Legislation

This Report assesses developments in international economic and exchange rate policies over the four quarters through June 2022. The analysis in this Report is guided by Sections 3001-3006 of the Omnibus Trade and Competitiveness Act of 1988 (1988 Act) (codified at 22 U.S.C. §§ 5301-5306) and Sections 701 and 702 of the Trade Facilitation and Trade Enforcement Act of 2015 (2015 Act) (codified at 19 U.S.C. §§ 4421-4422), as discussed in Section 2 of this Report.
Under the 2015 Act, Treasury is required to assess the macroeconomic and exchange rate policies of major trading partners of the United States for three specific criteria. Treasury sets the benchmark and threshold for determining which countries are major trading partners, as well as the thresholds for the three specific criteria in the 2015 Act. In this Report, Treasury has reviewed the 20 largest U.S. trading partners3 against the thresholds Treasury has established for the three criteria in the 2015 Act:

(1) A significant bilateral trade surplus with the United States is a goods and services trade surplus that is at least $15 billion.
(2) A material current account surplus is one that is at least 3% of GDP, or a surplus for which Treasury estimates there is a material current account “gap” using Treasury’s Global Exchange Rate Assessment Framework (GERAF).
(3) Persistent, one-sided intervention occurs when net purchases of foreign currency are conducted repeatedly, in at least 8 out of 12 months, and these net purchases total at least 2% of an economy’s GDP over a 12-month period.4

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