Vietnamese Official, AmCham Leader Say Tariffs Over Currency Can Be Avoided

At a webinar on U.S.-Vietnam economic relations, Ambassador Ha Kim Ngoc said Vietnam is working to narrow the trade deficit with the U.S., whether by buying more American agricultural exports or encouraging Vietnamese businesses to open factories in the U.S. "I don’t think we can solve the problem overnight, with COVID-19 and the increased demand of the goods from Southeast Asia, and particularly Vietnam," he said April 27.

Nguyen Xuan Thanh, a public policy professor at Fulbright University in Vietnam, noted that exports to the U.S. in the first three months of 2021 were up 29% from the same period last year, and that in all of 2020, exports were up 7%, with most of that increase attributable to U.S. purchasers.

Ha said that Vietnam welcomes the fact that the recent Treasury Department report said there was insufficient evidence that Vietnam is manipulating its currency, despite interventions in the exchange markets and the large trade deficit. "We are no longer in the list of money manipulators, but we know we still have some issues to work together," he said. He said Vietnam has been giving the Treasury Department and the Office of the U.S. Trade Representative the information they need. "I want to assure you Vietnam monetary policy is not to gain advantage in trade with the United States," he said.

AmCham Vietnam Executive Director Mary Tarnowka said she doesn't believe there is a danger of Section 301 tariffs against Vietnam over currency manipulation or timber. "I think both sides are really trying to manage the situation so that we’re not likely to end up with a [301] sanctions situation," she said during the webinar. She said AmCham officials are encouraging Vietnam to address the trade imbalance by buying more energy, aircraft and agricultural goods, even though the "current administration is not quite as fixated" on the trade deficit.

"U.S businesses are very bullish about the opportunities here in Vietnam," she said, since labor costs increased in China, Vietnam handled COVID-19 so well, and because of trade tensions between the U.S. and China.

Ted Osius, a former ambassador to Vietnam and now a representative for Google in Asia, said that would be hard, since President Joe Biden is not prioritizing trade negotiations, and since political considerations would require renegotiation of the Trans-Pacific Partnership in a way that Vietnam would find difficult. He said a digital trade agreement, similar to the one in the U.S.-Japan mini-deal, or in the TPP itself, would be low-hanging fruit.