One last ‘gift’ from Donald Trump to President-elect Joe Biden is most likely going to be a widened trade gap, now with some additional tariffs on Vietnamese goods also in the pipeline. The recent and Trump’s last foreign policy report issued by the US Treasury Department has designated Switzerland and Vietnam as currency manipulators, while China and eight other countries go on the watchlist.
Now, all the US companies that are involved in trade with Vietnam will most probably face some hefty tariffs as the US Trade Representative’s (USTR) Section 301 is carrying out a thorough investigation in the violations of the three thresholds that Vietnam is being accused of for currency manipulation.
As per the US Treasury’s report, both the countries had foreign exchange market interventions, global current account surplus which was around 5% to 14% of the GDP. Along with that, there was a more than $20 billion trade surplus with the US.
USTR’s Section 301 is investigating Vietnam’s acts in the undervaluation of its currency.
The USTR is investigating all the policies and practices that may have contributed to the undervaluation of the Vietnamese currency, which may have been harmful to American commerce.
Also, the USTR is looking into some cases regarding Vietnamese manufacturers using illegally harvested timber.
The investigation reports are likely to come by 7th January, and that will give around 2 weeks to Trump to take retaliatory actions against Vietnam in the form of tariffs. There is a possibility that these tariff collections could begin immediately as Biden assumes Office. But it will strain America’s trade ties further.
Vietnam has been America’s ‘go-to’ trade partner after the trade war with China
The trade war between China and America has worsened over these past years, and last year only, America had labeled China as one of the currency manipulators too. However, they removed this label in early 2020 when both the countries signed a ‘Phase 1’ trade deal. But because of the significant tariffs that were imposed on the American companies involved in trade with China, these companies and investors started trades with Vietnam to avoid all the extra duty and charges.
The history between Vietnam and America is also not good, but over the past few years, their relationship had started improving and the trade had also increased. In 2019, there was around $66.6 billion worth of imports from Vietnam in the US, but from January to October 2020, the US companies imported around $65 billion worth of Vietnamese products.
American companies export more than $400 billion worth of apparel, footwear, furniture, electronics, and household items to Vietnam, all of which may see tariffs now too because there will definitely be some major economic consequences.
The Vietnamese Stance
Vietnam’s ministry of commerce thinks that any such action by Trump’s administration would make their companies lose trust and confidence in doing business with their US partners. The imports from the US will also see a significant decline as a consequence.
Around late December, both America and Vietnam will hold some intense negotiations about this situation.
The US companies have also started panicking.
All the concerned companies have started reaching out to Congress for help because they are expecting massive taxing on Vietnamese goods. The American Apparel and Footwear Association has told the USTR that they all got involved in heavy trade with Vietnam because of the ongoing trade war with China. Now, new tariffs on imports from Vietnam will cause severe disruption.
I’m Ava Paul, an experienced news website author with a special focus on the entertainment section. Over the past five years, I have worked in various positions of media and communication at World Stock Market. My experience has given me extensive knowledge in writing, editing, researching and reporting on stories related to the entertainment industry.
