WASHINGTON - The U.S. Department of Treasury has removed Vietnam from its list of currency manipulators. This could indicate that the U.S. might not apply tariffs or other restrictions on the country's imports.
This also seemingly represents a departure from the government's previous stance.
In October under the Trump Administration, the Office of the U.S. Trade Representative initiated a Section 301 trade investigation onto Vietnam, believing the country might be importing illegally harvested or traded timber. The USTR also speculated the country was intentionally undervaluing its currency.
The investigation concluded last month, with the USTR finding that Vietnam was devaluing its currency and that U.S. commerce was being harmed as a result. The Treasury Department also had claimed the country was intentionally devaluing its currency.
But now, for the four quarters ending in 2020, the Treasury said it could not find evidence that Vietnam manipulated its exchange rate.
This apparent change of heart could indicate tariffs will not be applied, as previously speculated.
This would be a relief for several trade groups. Both the Home Furnishings Association (HFA) and the National Retail Federation advocated strongly against tariffs soon after the investigation began.
"This is a critical fight," wrote the HFA in a letter to its members. "Home furnishings retail has been a bright spot in our economy as sales for furniture and bedding have been strong. Yet, meeting the demand for products is hampered by supply chain delays, disruptions, and price increases. Broad-spectrum tariffs against Vietnam products would hurt the home furnishing retail industry’s recovery through further price hikes and cause more disruption of the supply chain. That’s not good for you, your customers, or the US economy."
Vietnam has experienced extreme growth over the past few years. Wood exports to the U.S. surged to $2.4 billion for the first two months of 2021, a 51 percent increase over last year. The country has benefitted greatly over the tariffs placed onto China, seeing a 180 percent trade surplus since the 2016 election of Donald Trump.
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