US trade deficit with Vietnam soars beyond US$110 billion, as weak dong boosts exports
THE US trade deficit with Vietnam exceeded US$110 billion in the first 11 months of 2024, the latest US figures show, as exports from the South-east Asian industrial hub grew amid a record fall of its currency against the US dollar. The latest reading, released on Tuesday (Jan 7) by the US statistics agency, showed a nearly 18 per cent rise in the deficit compared with the same period the previous year.
The data confirms the Communist-run country has the fourth highest commercial surplus with the United States, topped only by China, the European Union and Mexico.
The large gap is seen by analysts as a major risk for the export-reliant nation amid threats from president-elect Donald Trump to impose tariffs of up to 20 per cent on all US imports.
That risk has been compounded by a sharp fall of Vietnam’s dong in recent months, with the dong trading near its lowest ever levels against the US dollar. The trend is closely watched in Washington as Vietnam is one of the countries under scrutiny for potential currency manipulation.
Vietnam, which counts the US as its biggest market, is home to big export-focused industrial operations of US multinationals such as Apple, Google, Nike and Intel.
The latest seasonally adjusted trade figures show that in the January to November period, Vietnam accumulated a commercial surplus with the US of US$111.6 billion, up from US$94.8 billion in the same period in 2023. Unadjusted data pointed to a larger gap of US$113.1 billion.
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In November, the trade gap expanded by another US$11.3 billion, accelerating from October, as Vietnam’s exports to the US rose, the adjusted data show, possibly supported by the weak dong.
“If the US perceives that Vietnam is deliberately keeping the dong weak to gain an unfair trade advantage, it could trigger renewed accusations of currency manipulation,” said Leif Schneider, head of international law firm Luther in Vietnam.
Trump ended his first term in the White House with Treasury declarations of Vietnam and Switzerland as currency manipulators over their market interventions to weaken the value of their currencies.
Vietnam’s central bank has said it was ready to intervene in the foreign exchange market in case of adverse economic impacts from currency moves, and has sold US dollars in the past to strengthen the dong.
On Tuesday, before new trade figures were released, the bank said it would monitor Trump’s policies and adjust accordingly.
The dong’s most recent depreciation against the US dollar is broadly in line with other major currencies. REUTERS
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