US considers to take step toward tariffs on Vietnam, Bloomberg says
An employee counts Vietnamese banknotes at a bank in Hanoi. Photo by VnExpress/Giang Huy.
President Joe Biden's administration is arranging a meeting on the subject on Wednesday, according to people familiar with the matter, who asked not to be identified because the discussions are private.
Officials from the Treasury Department, the Office of the United States Trade Representative, the Department of Commerce, and the National Security Council will be at the meeting.
The strategy is being implemented ahead of the October deadline, a year after the federal inquiry into imposing duties under Section 301 of the 1974 Trade Act for the United States began.
During the last days of President Donald Trump's presidency in January, the US condemned Vietnam's currency measures as unfair and restricting to American firms, but refrained from imposing punishing penalties on the country.
However, the trade investigation remains open, and will need to be given time for public comments and hearings if the US decides to formally impose tariffs on goods imported from Vietnam.
This means that according to trade experts, the initial phase of publishing the proposed product catalog should take place over the next several weeks.
Adam Hodge, a spokesman for USTR, declined to comment beyond saying that the agency’s investigation into Vietnam’s currency practices is ongoing. A Treasury spokesman declined to comment. The Department of Commerce, the National Security Council and Vietnam’s foreign ministry did not respond to Bloomberg's requests for comment.
The Biden administration has so far taken a softer stance on currency issues than its predecessor. In December, Trump’s Treasury Department separately tagged Vietnam, along with Switzerland, with a currency-manipulation label. Then in April Biden’s Treasury dropped the designation, even as Vietnam, Switzerland and Taiwan met thresholds for the label.
The Treasury said there was “insufficient evidence” to conclude that the three trading partners showed intent to enforce the tag “to prevent an effective balance of payments adjustment or to obtain an unfair competitive advantage in international trade”.
Furthermore, according to the April report, the US Treasury began “increasing bilateral involvement with Vietnam” earlier this year, assisting the Vietnamese government in developing a strategy to handle its low-priced currency and external surplus. According to sources close to the situation, the United States is still under pressure to enable Vietnam to appreciate the dong.
Vietnam’s central bank stated that it does not use the exchange rate to create an unfair competitive advantage in international trade. The Southeast Asian nation’s lumber industry has also vowed to tighten regulations and buy more American lumber to avoid punitive tariffs.
US is Vietnam’s largest export market, with the value of shipments doubling in the past five years. But the Southeast Asian country has seen a widening trade deficit with the US that has made it a target for Trump. This year, the trade gap with the US is the third largest after China and Mexico, according to Bloomberg.
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