Alex Lawson, 15 January 2021
The Office of the U.S. Trade Representative found that Vietnam’s currency manipulation is unfairly hindering U.S. businesses but held off on teeing up new tariffs against Hanoi on Friday, leaving a final decision in the case up to the incoming Biden administration.
After a three-month investigation, the USTR found that Vietnam’s persistent undervaluation of its currency, paired with its more recent intervention in foreign exchange markets, artificially lowered the prices of Vietnamese exports to the U.S., leaving U.S. producers at a disadvantage.
“Unfair acts, policies and practices that contribute to currency undervaluation harm U.S. workers and businesses, and need to be addressed,” U.S. Trade Representative Robert Lighthizer said in a statement.
Lighthizer’s investigation was launched in October under Section 301 of the Trade Act of 1974, the same expansive trade law that President Donald Trump used to amass tariffs on China. But in the Vietnam case, USTR declined to retaliate for now, with Lighthizer saying he hoped that the U.S. and Vietnam “can find a path for addressing our concerns.”
At the heart of the USTR’s report is its analysis of Vietnam’s foreign exchange market interventions, which were made while it was carrying a significant current account surplus.