U.S. Treasury Department Designates Vietnam a Currency Manipulator

Key Summary

• U.S. Treasury officially designated Vietnam a currency manipulator alongside Switzerland in its latest foreign exchange report.
• The designation heightens risks for companies operating in Vietnam as USTR reviews potential tariff actions.
• A Section 301 investigation into Vietnam’s currency practices may lead to rapid tariff increases on imports.
• USTR could impose preliminary duties on Vietnamese goods before the December 29 hearing.
• All imports from Vietnam are now vulnerable to increased tariffs following the manipulator designation.

This morning, the U.S. Treasury Department released its long-awaited report on the foreign currency exchange policies of U.S. trading partners. The report can be found here. While the U.S. placed ten countries on their monitoring list for potential violations, the report determined that Vietnam and Switzerland met the criteria to be designated as currency manipulators.

For companies conducting business in Vietnam, this designation is concerning. It comes in the midst of an ongoing Section 301 investigation launched by the U.S. Trade Representative (USTR) in October, that among other things, alleged that Vietnam was manipulating its currency and could be subject to increased tariffs on imports.

IPC understands that USTR was waiting on this report before taking action. Now that the report has been released, USTR may issue preliminary tariff increases on billions of dollars of products from Vietnam, even before a scheduled hearing on December 29. It is unclear how many products USTR could target, though now that Vietnam has been designated a currency manipulator, all imports are under threat of increased duties.

IPC continues to monitor the situation and will give updates as we have them.