The U.S. trade deficit with Vietnam hit over $110 billion in the first 11 months of 2024, according to the latest figures from the U.S. government. This comes as exports from Vietnam, a key player in Southeast Asia's industrial scene, surged while its currency faced a significant drop against the dollar.
The recent report, released on Tuesday, indicates that the deficit has jumped nearly 18% compared to the same timeframe last year. This data highlights that Vietnam now ranks fourth in terms of commercial surplus with the U.S., following China, the European Union, and Mexico.
Analysts view this substantial deficit as a serious concern for Vietnam, which heavily relies on exports, especially with President-elect Donald Trump threatening to impose tariffs of up to 20% on all imports from the U.S.
The situation has been worsened by a steep decline in the value of the Vietnamese dong, which is now trading close to its lowest levels against the dollar. This trend is being closely monitored in Washington, as Vietnam is one of the countries being examined for possible currency manipulation.
As the largest market for Vietnam, the U.S. hosts major export-driven operations from American companies like Apple, Google, Nike, and Intel.
The latest seasonally adjusted trade data shows that from January to November, Vietnam recorded a commercial surplus of $111.6 billion with the U.S., up from $94.8 billion during the same period in 2023. Unadjusted figures indicate an even larger deficit of $113.1 billion.
In November alone, the trade gap widened by another $11.3 billion, increasing from October, as Vietnam's exports to the U.S. continued to rise, likely aided by the weaker dong.
"If the U.S. 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 wrapped up his first term in the White House by labeling Vietnam and Switzerland as currency manipulators due to their actions aimed at lowering the value of their currencies.
Vietnam's central bank has stated that it's prepared to step in the foreign exchange market if there are negative economic effects from currency fluctuations, and they've previously sold dollars to boost the dong's value.
On Tuesday, ahead of the release of new trade data, the bank mentioned it would keep an eye on Trump's policies and make adjustments as needed.
The recent drop in the dong's value against the dollar is generally consistent with trends seen in other major currencies.