A new trade war front? US considers trade and currency practices in Vietnam – RT Business News

Using the same law that allowed the United States to impose tariffs on billions of dollars of Chinese imports, the Trump administration opened an investigation into the business practices of one of its largest trading partners, Vietnam.

The investigation, which began at the direction of President Donald Trump and announced by the US Trade Representative’s Office late Friday, focuses on two cases. The first is whether Vietnam deliberately devalued its currency, the dong, which would make its products cheaper overseas and hurt US trade.

“Unfair currency practices can harm American workers and companies that compete with Vietnamese products that may be artificially low prices due to currency devaluation,” US Trade Representative Robert Lighthizer said as quoted by the media.

Also on rt.com
Vietnam signs a historic free trade agreement with the European Union to boost the crisis-affected economy

Washington also wants to investigate Vietnam’s imports of illegally harvested or traded timber, it says “It harms the environment and is unfair to American workers and companies.”

The investigation is based on Article 301 of the Trade Act of 1974 – the same provision the Trump administration used to start a trade war with China and impose punitive tariffs on Chinese imports. Washington has also used allegations of currency manipulation against China at the height of trade tensions between the world’s two largest economies. Last year, the United States designated a competitor in the trade war as a currency manipulator, but it eventually removed Beijing from the list as the two sides approached a trade truce.

Vietnam is now among the 10 largest trading partners of the United States, but at the same time it has the fourth-highest trade surplus with it. America’s trade deficit with the Asian country reached nearly $ 35 billion by July, surpassed only by China, Mexico and Switzerland.

Vietnam has been stuck on the Treasury’s list of currency manipulators since last year. In August, the Treasury Department decided that Vietnam had devalued its currency in a trade case involving tires, saying the dong was undervalued by 4.7 percent against the dollar.

Hanoi has repeatedly denied these allegations, saying that it does not use exchange rates and monetary policy to create unfair competitive advantages in international trade.

Vietnam was seen as one of the biggest winners in the raging US-China trade conflict, as some producers decided to move their operations to the country to escape tariffs. While Washington’s move against Vietnam could result in losses for those manufacturers, the investigation is unlikely to end before the election, as it usually takes months.

For more stories on economics and finance, visit RT’s business section

Leave a Reply

Your email address will not be published. Required fields are marked *