U.S. states Vietnam’s currency actions ‘unreasonable’ but holds off on tariffs

WASHINGTON (Reuters) – President Donald Trump’s administration stated on Friday Vietnam’s steps to push down the benefit of its currency are “unreasonable” and restrict U.S. commerce, but did not get fast action to impose punitive tariffs.

Releasing the effects of its so-termed Portion 301 investigation into Vietnam’s forex procedures, the U.S. Trade Representative’s (USTR) office stated it would keep on to evaluate all accessible alternatives to suitable the situation. That method will pass to the administration of Democratic President-elect Joe Biden, who is thanks to take place of work on Wednesday.

The U.S. Treasury Division in December labeled Vietnam a “currency manipulator” thanks to its escalating trade surplus with the United States, its big world wide existing account surplus and large foreign trade marketplace intervention to keep down the benefit of its dong forex.

Enterprise groups and trade gurus experienced feared this would lead to tariffs in the USTR investigation opened final Oct as a parting shot from the Republican Trump, who aggressively imposed tariffs through his 4 many years in office environment.

The USTR stated it consulted the Treasury Division on Vietnam’s trade-level insurance policies.

“Unfair acts, insurance policies and techniques that contribute to forex undervaluation damage U.S. employees and organizations, and have to have to be resolved,” U.S. Trade Representative Robert Lighthizer reported in a assertion. “I hope that the United States and Vietnam can find a route for addressing our fears.”

Vietnamese government stated on Saturday it welcomed the final decision of the USTR, describing it as “a good result” of the attempts of the federal government and enterprises from both of those Vietnam and the U.S.

“Vietnam will continue its efforts to open up its sector and boost plan dialogues and strictly adhere to agreements between the two sides…to preserve a steady trade relation with a focus on for a balanced, sustainable and mutually-valuable trade,” the federal government reported in a assertion.

The Part 301 investigation – named right after a provision in a U.S. trade law – was the exact tool that Lighthizer employed to start a sweeping tariff war versus China, which has left punitive U.S. tariffs on $370 billion truly worth of annual Chinese imports and prompted many organizations to change source chains out of China. Vietnam has been a important beneficiary of investment from those companies trying to find to avoid U.S. tariffs on China.

The USTR’s determination to hold off on ordering tariffs towards Vietnamese items provides Biden’s nominee as trade agent, Katherine Tai, some breathing space in choosing how to technique Vietnam.

A spokesman for Biden’s changeover group declined to remark on the USTR determination.

The Vietnamese governing administration claimed its trade ministry and connected organizations are eager to speak with the USTR to tackle the superb concerns in the trade relations amongst the two countries to officially shut the investigation.

Reporting by David Lawder Extra reporting by Khanh Vu in Hanoi Editing by Will Dunham, Chris Reese, Aurora Ellis and Frances Kerry