US trade agency drops tariff threat against Vietnam

WASHINGTON: The US Trade Representative’s office on Friday said it had determined that no tariff action against Vietnam was warranted ater its central bank agreed with the US Treasury not to manipulate its currency for an export advantage.

In a statement, USTR said it found that the U.S. Treasury-state Bank of Vietnam agreement earlier this week “provides a satisfactory resolution of the mater subject to investigation and accordingly that no trade action is warranted at this time.”

The State Bank of Vietnam on Monday pledged in an agreement with Treasury Secretary Janet Yellen to refrain from “competitive devaluation” of its dong currency and make its monetary and exchange rate policies more transparent.

The deal follows months of US pressure on Vietnam over its currency practices and ballooning U.S. trade surplus. The Trump administration in its final weeks had declared Vietnam a currency manipulator and had threatened to impose punitive tariffs on imports from Vietnam over its currency practices.

The USTR determination, outlined in a federal register htps://ustr.gov/sites/default/files/files/ Press/releases/vietnam_currency_301_notice_frn.pdf notice, only pertains to its Section 301 investigation into Vietnam’s currency practices. It does not affect a separate Section 301 investigation into Vietnam’s use of illegally harvested or traded timber that could lead to tariffs on furniture and other wood products imported from Vietnam.