The Office of the United States Trade Representative (USTR) on July 23 issued a formal determination in the Viet Nam Currency Section 301 investigation reflecting the agreement reached earlier this week between the Department of the Treasury and the State Bank of Viet Nam (SBV). 

The determination finds that the Treasury-SBV agreement provides a satisfactory resolution of the matter subject to investigation and accordingly that no trade action is warranted at this time. 

USTR, in coordination with Treasury, will monitor Viet Nam’s implementation going forward.

U.S. Trade Representative Katherine Tai commended Viet Nam for its commitment to addressing U.S. concerns with its currency practices and setting an important example for the Indo-Pacific region. 

Going forward, in coordination with Treasury, the USTR will work together with Viet Nam to ensure implementation, and continue to examine the currency practices of other major trading partners, she added.

Earlier on July 19, Governor of the SBV Nguyen Thi Hong held a virtual meeting with U.S. Secretary of the Treasury Janet L. Yellen.

At the meeting, the SBV underscores that the focus of its monetary policy framework is to promote macroeconomic stability and to control inflation.

Viet Nam is bound under the Articles of Agreement of the International Monetary Fund (IMF) to avoid manipulating its exchange rate in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage and will refrain from any competitive devaluation of the Vietnamese dong, Nguyen underscored.

The SBV is also making ongoing efforts to further modernize and make more transparent its monetary policy and exchange rate framework, she added. 

In support of these efforts, the SBV will continue to improve exchange rate flexibility over time, allowing the Vietnamese dong to move in line with the stage of development of the financial and foreign exchange markets and with economic fundamentals, while maintaining macroeconomic and financial market stability, the Governor of the SBV affirmed.

The USTR investigation was initiated in October 2020 under Section 301 of the Trade Act of 1974.  On January 15, 2021, USTR issued a determination that Viet Nam’s acts, policies, and practices including excessive and one-sided intervention in the foreign exchange markets and other related actions, taken in their totality, are unreasonable and burden or restrict U.S. commerce.