US removes Vietnam tariff threat after currency-dispute truce

The U.S. revoked the threat of tariffs on Vietnamese goods after the two nations reached an agreement under which the Asian nation will allow more flexibility in its currency.

The agreement between the U.S. Treasury and State Bank of Vietnam provides “satisfactory resolution of the matter,” and no trade action is warranted, the Office of the U.S. Trade Representative said in a statement Friday. The USTR and Treasury will monitor Vietnam’s implementation, it said.

During the closing days of President Donald Trump’s administration in January, the USTR labeled Vietnam’s currency actions unreasonable and restrictive to American businesses following a so-called section 301 Trade Act probe, but refrained from hitting the nation with punitive tariffs. The Biden administration had been facing an imminent deadline for publishing a proposed product list under the probe begun under Trump.

The U.S. is Vietnam’s biggest export market, with the value of shipments doubling over the past five years. But the Southeast Asian country has seen a widening trade gap with the U.S. that made it a target for Trump; this year it has the largest merchandise surplus with the U.S. behind China and Mexico.