USA (Washington Insider Magazine) – On August 2, the U.S. Commerce Department announced its decision to retain Vietnam’s classification as a ‘non-market economy’ (NME) following a year-long review. This decision means that the U.S. will continue using its current methodology for calculating anti-dumping duties on Vietnamese imports, despite acknowledging the country’s recent economic reforms. The delay in the decision, caused by a cybersecurity firm’s IT issues, has added to the complexity surrounding this matter.
The Ministry of Industry and Trade in Vietnam expressed dissatisfaction with the decision, claiming it fails to acknowledge the significant economic progress the country has made. Vietnam had a strong case for market economy classification, supported by a wealth of material from the government. Vietnam’s trade relations with the United States are currently impacted by higher tariffs and stronger trade restrictions as a result of its NME classification.
Domestic and International Reactions
In the U.S., the decision has elicited mixed responses. Domestic steelmakers, shrimpers, honey farmers, and some Congressional representatives, opposed the upgrade, citing concerns about unfair competition and persistent state influence in Vietnam’s economy. Conversely, U.S. retailers and business groups have supported the upgrade, highlighting Vietnam’s role in diversifying supply chains away from China.
The decision is significant concerning the U.S. efforts to counter China’s influence in Southeast Asia, with Vietnam positioned as a key ally. The timing, just before the U.S. presidential elections, has led to speculation about political motivations. Analysts suggest that a change in administration could reverse any potential upgrade in the future.
Impact on U.S.-Vietnam Relations
According to VietnamBreifing, Vietnam’s government had sought the market economy status as a critical step in strengthening its strategic partnership with the U.S., which was elevated last year. The U.S. decision to maintain Vietnam’s NME status may affect the trajectory of bilateral relations as both countries navigate the geopolitical challenges posed by China.
The ongoing classification of Vietnam as a non-market economy underscores the complex interplay of domestic interests, international relations, and geopolitical strategy, with implications for future U.S.-Vietnam interactions.