United States agreement with Vietnam on currency practices; possible Section 301 tariff implications

State Bank of Vietnam will allow the country’s currency to move in line with the development of Vietnam’s financial and foreign exchange market.

Agreement with State Bank of Vietnam that addresses U.S. concerns about Vietnam’s currency

The United States—in reaching an agreement with Vietnam regarding its currency practices—is no longer expected to take further action with regard to a Section 301 investigation and possible additional tariffs on imports from Vietnam. The Office of the U.S. Trade Representative (USTR) on July 23, 2021, confirmed that “no trade action is warranted at this time.” Read the USTR release

The USTR in January 2021 issued findings in a Section 301 investigation of Vietnam’s currency valuation practices, finding that these currency practices were “unreasonable and burden or restrict U.S. commerce” although no actions were taken—read TradeNewsFlash.

The U.S. Treasury Department this week announced an agreement with the State Bank of Vietnam that addresses U.S. concerns about Vietnam’s currency practices. Under the agreement, the Vietnamese state bank will continue to provide information necessary for U.S. Treasury to conduct an analysis and report on Vietnam’s activities in the foreign exchange market in Treasury’s semiannual report to the U.S. Congress on the macroeconomic and foreign exchange policies of major trading partners of the United States.

A related USTR release announces that the State Bank of Vietnam will allow the country’s currency to move in line with the development of Vietnam’s financial and foreign exchange market and economic fundamentals. 
 

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