Vietnam plans to cut US tariffs on pork as trade tensions ease

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By Nguyen Dieu Tu Uyen

Vietnam plans to lower tariffs on US frozen pork, corn and wheat, another sign of easing trade tensions with its largest export market.

The cuts, which will be announced this quarter, are aimed at increasing imports from the United States and reducing its trade deficit with Vietnam, Nguyen Do Anh Tuan, spokesperson for the Vietnamese Ministry of Agriculture, said on Monday.

The planned cuts will see tariffs lowered to 10% from 15% for frozen pork, 2% from 5% on corn and eliminated for wheat from the current 3%, Tuan said.

The move to boost purchases of U.S. agricultural products is the latest push to improve relations as Washington and Hanoi seek to deepen their economic and geopolitical ties to balance China’s growing weight in the region.

Vice President Kamala Harris urged Vietnam to reduce agricultural tariffs during her visit in August, where she also urged the transformation of their relationship into a strategic partnership.

“The two sides have shown mutual understanding to avoid conflict,” said Le Dang Doanh, a Hanoi-based economist and former government adviser. “The two are trying to compromise.”

The cuts also come as Vietnam seeks international help to recover from its worst Covid-19 outbreak, which has closed factories that are essential for manufacturers and customers around the world for industries such as apparel, technology and the automobile.

The increase in merchandise trade with Vietnam has resulted in the United States’ third-largest trade deficit, after China and Mexico, making it a target for the administration of former President Donald Trump, who has criticized its monetary policy and threatened to take action on its timber exports. President Joe Biden’s White House addressed both issues this year, including Friday’s announcement of a deal on allegedly illegally harvested and traded timber.

Pork accounts for over 70% of Vietnam’s total meat consumption. While the country has one of the largest pig herds in Southeast Asia, demand for imported pork has increased over the past two years as its pig farms have been ravaged by African swine fever.

Vietnam temporarily reduced its import tariffs for frozen pork to the United States to 10% last year, leading to a doubling of U.S. exports to the country in the second half of 2020 compared to the first half, according to a May letter to US Trade Representative Katherine Tai signed by 72 members of Congress.

© 2021 Bloomberg LP


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