U.S. trade chief raises concerns on Vietnam currency policy

U.S. Trade Representative Katherine Tai raised concerns about Vietnam’s currency practices during a virtual meeting on Thursday with the country’s trade minister.

Tai also addressed U.S. concerns on illegal timber practices, digital trade and agriculture, according to a readout from her office of the meeting with Tran Tuan Anh, Vietnam’s minister of industry and trade. They agreed to a “sustained dialogue” in the future, it said.

Vietnam and the U.S. “will continue to actively cooperate to comprehensively address the concerns to maintain stable trade relations,” the trade ministry said in a statement posted on its website.

Vietnam’s currency had become a target in the Trump administration even as the former enemies continued to become closer to counter China’s rising military and economic might in the region. The U.S. has refrained from hitting Vietnam with punitive tariffs even after the U.S. Treasury designated the Hanoi government as a currency manipulator and the U.S. Trade Representative labeled Vietnam’s currency actions unreasonable and restrictive to American businesses.

The USTR’s determination in January was the result of an investigation that started last year under section 301 of the Trade Act of 1974 — the same legislation the Trump administration used to apply tariffs on billions of dollars of imports from China.

Vietnam’s central bank has maintained it doesn’t use the exchange rate to create an unfair competitive advantage in international trade. The Southeast Asian nation’s wood industry has vowed to tighten regulations and buy more American lumber to avoid punitive tariffs that would devastate the sector.

Tai and Anh plan to hold a meeting later this year under the Trade and Investment Framework Agreement to work on “resolving bilateral issues,” according to the U.S. readout.

By John Boudreau & Mai Ngoc Chau – Bloomberg – 2 avril 2021