US launches currency manipulation inquiry against Vietnam
Probe could result in tariffs being imposed on imports from Asian country
The US has launched an investigation into alleged currency manipulation by Vietnam, opening a new front in Donald Trump’s trade war weeks before a presidential election. The US trade representative’s office late on Friday evening said it would launch a so-called Section 301 investigation into Vietnam — the same process it used to place tariffs on billions of dollars of Chinese imports into the US.
The results of that investigation could lead to punitive duties being levied on Vietnamese imports to the US following allegations of currency manipulation, harming any manufacturers who have moved operations to Vietnam to escape facing tariffs on Chinese goods entering the US. A new rule published by the Trump administration earlier this year allows the US to treat currency undervaluation by trading partners as something that could trigger duties.
In August the US Treasury and Department of Commerce determined that Vietnam was manipulating its currency when investigating a specific case involving tyre imports, which the agencies were weighing to place tariffs on. The Trump administration has previously focused its accusations on currency manipulation on Beijing, which it accused of depressing its exchange rate against the dollar to make Chinese goods cheaper to international buyers.
Robert Lighthizer, US trade representative, said “unfair currency practices can harm US workers and businesses that compete with Vietnamese products that may be artificially lower priced because of currency undervaluation”. “We will carefully review the results of the investigation and determine what, if any, actions it may be appropriate to take,” Mr Lighthizer said. USTR said it would consult with the US Treasury on issues related to currency devaluation and exchange rate policy as part of the investigation.
The agency announced a separate investigation into Vietnam’s harvesting and trading of timber. In a statement, Mr Lighthizer said “using illegal timber in wood products exported to the US market harms the environment and is unfair to US workers and businesses”.
By Aime Williams – The Financial Times – October 3 2020