When Vietnam is rushing towards the next “world factory”, as expected, the United States has turned its back on Vietnam.
When Vietnam is rushing towards the next “world factory”, as expected, the United States has turned its back on Vietnam .
You know, not long ago, Vietnam seemed to be the darling of the United States.
The U.S. Treasury Department identified Vietnam as a currency manipulator on December 16 and will list Vietnam as a target of sanctions.
Vietnam is becoming a manufacturing hub, and its exports to the United States have surged, arousing the vigilance of the Trump administration in the United States. Vietnam is a country that develops its economy mainly by attracting foreign investment, and U.S. sanctions may affect its national strategy.
If I remember correctly, this is the first time Vietnam has enjoyed this kind of treatment.
What is a currency manipulator?
1. The trade surplus with the United States exceeds 20 billion US dollars;
2. The degree of foreign exchange intervention is higher than 2% of GDP;
3. The global current account surplus exceeds 2% of GDP.
Vietnam’s trade surplus with the United States in the past year was US$58 billion, surpassing Japan (US$57 billion) and jumping to fourth place, etc., meeting the three recognition standards.
As long as these three conditions are met, you will be on the US blacklist. The only country on this list is Switzerland.
The reason is also very simple. The US economy is very weak, while the Vietnamese economy is very good. In the first nine months of this year, Vietnam’s exports to China increased by 15%, and exports to the United States grew even faster, 23%, to $54.7 billion.
In addition, the U.S. Treasury Department has also added Taiwan, Thailand, and India to the exchange rate monitoring list. Currently, there are 10 countries and regions on the list, including China, Japan, South Korea, Germany, Italy, Singapore and Malaysia.
The United States is itching with hatred
Vietnamese officials responded in a low profile
The Vietnamese are happy to export, but the Americans are gritting their teeth in hatred.
Vietnam has an abundant labor force, and foreign direct investment (FDI, approved) in 2019 increased by 7.2% from 2018 to US$38 billion. This is 1.8 times that of 10 years ago, reaching an all-time high. South Korea’s Samsung Electronics transferred all Chinese mobile phone production to Vietnam in 2019. Samsung alone accounts for a quarter of Vietnam’s total exports.
Amid the COVID-19 epidemic, foreign-funded enterprises have transferred part of their production to Vietnam, which has also accelerated Vietnam’s increase in exports to the United States. Vietnam controlled the first wave of the COVID-19 epidemic early and did not have a great impact on corporate production activities, which also played a positive role.
The report lists Switzerland and Vietnam as currency manipulators, saying that the two countries continue to intervene in the foreign exchange market to limit the appreciation of their currencies. The U.S. Treasury Department stated that at least part of the foreign exchange intervention measures taken by the two countries in the past four years was to prevent effective balance of payments adjustments, and Vietnam also attempted to gain an unfair competitive advantage in international trade through exchange rate management.
U.S. Treasury Secretary Mnuchin said in a statement that the United States will take strong measures to ensure that its workers and companies benefit from economic growth, and the U.S. Treasury Department will follow up on its response to Vietnam. and Swiss findings in an effort to eliminate practices that create unfair advantages for foreign competitors.
In this regard, the State Bank of Vietnam issued a relatively mild announcement on the 17th. In the announcement issued on the 17th, the State Bank of Vietnam emphasized that Vietnam has made great progress in monetary policy in recent years. The purpose of regulating the exchange rate within the framework is to curb inflation and promote macroeconomic stability, rather than to seek unequal competitive advantages in international trade.
Vietnam’s official media “Youth”
Vietnam’s central bank stated that the trade surplus with the United States and The current account surplus is due to the characteristics of the Vietnamese economy. But the bank also said it would work with the U.S. government to ensure “harmonious and fair” trade relations.
If a country labels another country as a currency manipulator, it must impose severe trade sanctions on the other country accordingly, which is likely to trigger large-scale trade between the two parties. The war has spread beyond the two countries and spread to the whole world.
Therefore, once it is identified as a “currency manipulator”, it will inevitably lead to a decline in the defining country’s exports, which will seriously drag down the overall exports of the defined country (exporting country), and the industrial chain will be even more broken. , the unemployment rate is rising rapidly.
This time, can Vietnam withstand it? </p
