The U.S. Department of Commerce is imposing a preliminary anti-subsidy tariff on car and truck tires from Vietnam, citing the Southeast Asian nation’s “undervalued currency” among the reasons for the decision.
It’s the first time the Commerce Department has based a countervailing duty on the value of a foreign currency, it said in a statement Wednesday. The tariffs range from 6.23% to 10.08%. U.S. imports of passenger tires from Vietnam were valued at about $469.6 million in 2019, the department said.
Vietnam has repeatedly denied it uses exchange rates to boost trade. “Vietnam has been closely monitoring the situation since it was raised,” Ministry of Foreign Affairs vice spokesperson Duong Hoai Nam said during a press briefing in Hanoi when asked about the tariffs. “We have explained to the U.S. our relevant policies.”
Prime Minister Nguyen Xuan Phuc, in a meeting last month with Adam Boehler, head of the U.S. International Development Finance Corporation, said the government doesn’t use its currency “to create a competitive advantage” for its manufacturing sectors.
The tariff follows the Trump administration’s October announcement of a trade investigation into Vietnam’s currency policy. The probe is also looking into the Southeast Asian country’s import of illegal timber.
The Commerce Department will instruct U.S. Customs and Border Protection to collect cash deposits from importers of passenger tires from Vietnam based on the preliminary rates. It will make a final determination on the tariff on or about March 16, which is around the time the U.S. International Trade Commission is scheduled to rule on the case.
Vietnam’s premier, in his meeting with Boehler, asked the Trump administration to “have a more objective assessment of reality in Vietnam” and said that using its currency to gain advantage would “seriously hurt macroeconomic stability, people’s and investors’ confidence” while damaging the nation’s economy.
