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US presidential election 2020
This Week in AsiaEconomics

For Vietnam, Biden win could mean end of USTR currency and trade inquiries

  • The inquiries into currency manipulation and furniture exports, launched before the US election, could now be paused or cancelled
  • Analysts said the investigations undercut the US effort to use Vietnam as an Indo-Pacific strategic partner in countering China

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A photo display of Vietnamese Prime Minister Nguyen Xuan Phuc and US President Donald Trump outside a Hanoi hotel. The US-Vietnam relationship could take a turn for the better under a Joe Biden presidency, at least in terms of trade. Photo: EPA-EFE
Chris HumphreyandMichael Tatarski
Just weeks before the US presidential election, the administration of President Donald Trump took aim at Vietnam, opening an investigation into the extent to which illegally harvested timber is exported to the United States from the Southeast Asian nation and accusing Hanoi of manipulating the country’s currency. Both inquiries carry the threat of tariffs and other restrictions on imports of Vietnamese goods and services.
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This announcement of the investigations hardly went down well in Hanoi, given that they are the same type of trade and currency inquiries that resulted in Washington slapping punishing tariffs on China in 2018. But following President-elect Joe Biden’s slow-burn triumph in last week’s election, analysts say the incoming president’s trade policies are likely to be kinder to Vietnam.
Le Hong Hiep, a research fellow at the ISEAS-Yusof Ishak Institute in Singapore, said Vietnam might expect the new US administration to “adopt less aggressive policies on trade, and that means they may moderate on trade with Vietnam and may pause or cancel the currency manipulation investigation”.

The investigations, launched by the United States Trade Representative (USTR), are being carried out at a crucial juncture for US-Vietnam ties, especially as the Trump administration had identified Vietnam as a key strategic partner in its attempts to counter China’s influence in the South China Sea.

In November 2017, during Trump’s state visit to Vietnam, he agreed to a new three-year defence cooperation plan. Since then, Vietnam has hosted visits from two US Navy aircraft carriers – the first since the Vietnam war – and received two US Coast Guard cutters to boost patrols in the South China Sea, along with US$150 million under the Foreign Military Financing programme.

Considering such crucial developments in relations between the two former foes, some analysts say the USTR probes represent a diplomatic disaster.

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Southeast Asia expert Carl Thayer of the University of New South Wales Canberra says the USTR’s investigations are “an illustration of dysfunction in the Trump administration’s implementation of national security policy. This decision undercut nearly four years of Trump administration efforts to enlist Vietnam as a strategic partner in its ‘Free and Open Indo-Pacific’ strategy.”

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