Vietnam's Exports Surge Amid Weak Dong, Pushing US Trade Deficit Beyond $110 Billion

HANOI:  The trade deficit of the U.S. with Vietnam surpassed $110 billion in the first 11 months of 2024, according to the latest U.S. data, as exports from the Southeast Asian manufacturing centre increased during a historic drop of its currency against the dollar. The most recent data, published on Tuesday by the U.S. Statistics Bureau, indicated an almost 18 per cent increase in the deficit compared to the same timeframe last year. The information verifies that the Communist-led nation possesses the fourth-largest trade surplus with the United States, surpassed only by China, the European Union, and Mexico. 

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US trade deficit with Vietnam exceeds $110 billion

Analysts view the significant gap as a critical risk for the export-dependent country, especially with President-elect Donald Trump's threats to introduce tariffs of as much as 20 per cent on all imports into the U.S. This risk has been intensified due to a recent significant decline in Vietnam's dong, which is trading close to its all-time lowest levels against the dollar. The situation is being monitored closely in Washington, as Vietnam is among the nations examined for possible currency manipulation. Vietnam, which regards the U.S. as its largest market, hosts significant export-oriented industrial operations of American multinationals like Apple (AAPL.O), Google (GOOGL.O), Nike (NKE.N), and Intel (INTC.O). 

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Recent seasonally adjusted trade data reveal that from January to November, Vietnam recorded a trade surplus of $111.6 billion with the U.S., an increase from $94.8 billion during the same timeframe in 2023. Unadjusted figures indicated a bigger disparity of $113.1 billion. In November, the trade deficit widened by an additional $11.3 billion, increasing from October, as Vietnam's shipments to the U.S. grew, the revised figures indicate, potentially aided by the weak dong. "If the U.S. believes that Vietnam is intentionally maintaining a weak dong to obtain an unfair trade benefit, it might lead to fresh claims of currency manipulation," stated Leif Schneider, head of the international law firm Luther in Vietnam.