Co-Authored by Sharath Patil
USTR’s Tougher Stance on Vietnam
The Trump administration has begun to exercise a tougher stance against Vietnam. The United States Trade Representative (“USTR”) initiated two Section 301 investigations against the Southeast Asian country on October 2, 2020. The focus of the two investigations are Vietnam’s acts, policies, and practices related to (1) the valuation of its currency, and (2) Vietnam’s importation and use of illegal timber. The news of USTR’s launch of these dual investigations came days before the U.S. Census Bureau’s latest trade data release – which indicated that the U.S. trade deficit in goods with Vietnam is at record levels, registering at $42.7 billion in the 8 months of data available for 2020. This skyrocketing trade deficit is relevant to U.S. trade policy towards Vietnam because one of President Trump’s key economic pledges was to lower the U.S. trade deficit with trading partners. A well-documented pattern of transshipment of goods from China through Vietnam to avoid U.S. Section 301 duties towards China could also explain Vietnam being targeted.