The U.S. labels a country as a currency manipulator if it meets two of the following three criteria: a current account surplus with the U.S. equivalent to 2 percent of gross domestic product (GDP); a trade surplus of at least $20 billion; and persistent market intervention on behalf of the nation’s currency.

In its report released Tuesday, the Trump administration did not label any country a currency manipulator seeking to gain unfair trade advantages over the U.S., but named a watchlist of nine countries, including Vietnam.

Vietnam has met two of the three criteria, having a trade surplus with the U.S. that has risen over the last decade to reach $40 billion in 2018, twice the threshold of $20 billion. Vietnam’s current account balance with the U.S. has also been rising over the last decade, reaching a surplus of more than 5 percent of the GDP in the four quarters through June 2018, more than double the threshold of 2 percent, the U.S Treasury said.

Vietnam is one of the most trade-dependent nations in the world, with exports equivalent to more than 100 percent of GDP, according to World Bank data.

The U.S. Treasury has excused Vietnam’s recent currency intervention as the Vietnamese authorities have credibly conveyed a "reasonable rationale" for rebuilding reserves.

While Vietnam’s purchases of foreign exchange outweighing sales over the course of last year, the central bank intervened in both directions, with foreign exchange sales used to resist downward pressure on the Vietnamese dong in the second half of 2018, the U.S Treasury noted.

It proposed that Vietnam reduce its interventions and allow for movements in the exchange rate that reflect economic fundamentals, including gradual appreciation of the real effective exchange rate, which would help reduce Vietnam’s external surpluses.

Eight other countries in the monitoring list are China, Japan, South Korea, Germany, Italy, Ireland, Singapore and Malaysia.