US commerce deficit with Vietnam soars past $110 billion, as weak dong boosts exports

By Francesco Guarascio

HANOI (Reuters) – The U.S. commerce deficit with Vietnam exceeded $110 billion within the first 11 months of 2024, newest U.S. figures present, as exports from the Southeast Asian industrial hub grew amid a report fall of its foreign money in opposition to the greenback.

The newest studying, launched on Tuesday by the U.S. statistics company, confirmed an almost 18% rise within the deficit in contrast with the identical interval the earlier yr. The information confirms the Communist-run nation has the fourth highest industrial surplus with the USA, topped solely by China, the European Union and Mexico.

The massive hole is seen by analysts as a serious threat for the export-reliant nation amid threats from President-elect Donald Trump to impose tariffs of as much as 20% on all U.S. imports.

That threat has been compounded by a pointy fall of Vietnam’s dong in latest months, with the dong buying and selling close to its lowest ever ranges in opposition to the greenback. The pattern is carefully watched in Washington as Vietnam is among the nations underneath scrutiny for potential foreign money manipulation.

Vietnam, which counts the U.S. as its largest market, is house to massive export-focussed industrial operations of U.S. multinationals corresponding to Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL), Nike (NYSE:NKE) and Intel (NASDAQ:INTC).

Newest seasonally adjusted commerce figures present that within the January-November interval Vietnam collected a industrial surplus with the U.S. of $111.6 billion, up from $94.8 billion in the identical interval in 2023. Unadjusted information pointed to a bigger hole of $113.1 billion.

In November, the commerce hole expanded by one other $11.3 billion, accelerating from October, as Vietnam’s exports to the U.S. rose, the adjusted information present, presumably supported by the weak dong.

“If the U.S. perceives that Vietnam is intentionally retaining the dong weak to achieve an unfair commerce benefit, it may set off renewed accusations of foreign money manipulation,” stated Leif Schneider, head of worldwide regulation agency Luther in Vietnam.

Trump ended his first time period within the White Home with Treasury declarations of Vietnam and Switzerland as foreign money manipulators over their market interventions to weaken the worth of their currencies.

Vietnam’s central financial institution has stated it was able to intervene within the international alternate market in case of hostile financial impacts from foreign money strikes, and has offered {dollars} previously to strengthen the dong.

On Tuesday, earlier than new commerce figures had been launched, the financial institution stated it could monitor Trump’s insurance policies and alter accordingly.

The dong’s most up-to-date depreciation in opposition to the greenback is broadly consistent with different main currencies.