Trump Administration Opens Investigation Into Vietnam’s Trade Practices

Hanoi, Vietnam

The Trump administration has opened an investigation into Vietnam’s trade practices, a step that could result in tariffs on the country’s products and potentially open a new front in the Trump administration’s global trade war.

The Office of the United States Trade Representative said it would begin looking into two issues: Vietnam’s importation and use of timber, which it said was illegally harvested and traded, and whether Vietnam has undervalued its currency, making its products unfairly cheap abroad.

The investigation will be carried out under Section 301, the same legal provision that the Trump administration used to start its trade war against China. The agency did not announce a timeline for the investigation, but it appears unlikely to conclude before the presidential election.

Vietnam is a major U.S. supplier of machinery, apparel, footwear and other products. American imports from Vietnam, and the U.S. trade deficit with the country, soared in 2019, largely as a result of Mr. Trump’s trade offensive against China.

After the United States imposed tariffs on more than $360 billion of Chinese goods, many manufacturers sought to relocate their operations out of China to other countries with low-cost labor, including Vietnam and Mexico. Electronics companies like Apple, Nintendo and Foxconn all rushed to secure Vietnamese factory space. The profitability of some of those operations could now be cast into doubt, if the United States chooses to impose broad tariffs on Vietnam.

In 2019, the Treasury Department included Vietnam on a watch list for its currency practices, along with China, Germany, Ireland, Italy, Japan, Malaysia, Singapore and South Korea. In August, the Treasury Department also said that Vietnam had manipulated its currency in a trade case that the Department of Commerce brought against Vietnam tire manufacturers.

(Source: Business Insider)