Baldwin Presses Biden Administration to Prioritize American Workers, Businesses in Review of Vietnam’s Nonmarket Economy Status

WASHINGTON, D.C. — U.S. Senator Tammy Baldwin (D-WI) and seven of her colleagues are calling on Secretary of Commerce Gina Raimondo to prioritize American workers and businesses when the Department of Commerce (Commerce) reviews Vietnam's status as a nonmarket economy (NME) under U.S. trade law. The Senators expressed concerns about changing Vietnam’s status and argued that there is significant evidence suggesting Vietnam does not meet the requirements to be designated a market economy. The Senators also highlight the close economic ties between Vietnam and China as well as China’s history of using Vietnam to circumvent U.S. trade laws and undermine American manufacturers and workers.

“Granting Vietnam market economy status before it addresses its clear nonmarket behavior and the severe deficiencies in its labor law will worsen ongoing trade distortions, erode the U.S. manufacturing base, threaten American workers and industries, and reinforce Vietnam’s role as a conduit for goods produced in China with forced labor,” the Senators wrote in their letter.

The NME label, also applied to China and Russia, is imposed on countries that often have heavy state involvement in their economies and the country’s exports to the U.S. do not reflect the fair value of the merchandise. The status allows the U.S. to impose higher anti-dumping duties on imports from these designated countries.

In October 2023, Commerce announced the initiation of a changed circumstances review (CCR) of Vietnam’s NME status. The Tariff Act of 1930 established a six-factor test to determine whether or not a country qualifies as a nonmarket economy, and the lawmakers note that the reality of Vietnam’s economy—including evidence collected by the U.S. government itself—shows Vietnam does not meet any of the first five factors.

The sixth factor Commerce is required to consider is a catch-all, giving it the flexibility to consider additional factors it deems appropriate. The lawmakers urged Commerce, as part of its evaluation of Vietnam’s ability to meet the sixth factor, to take into account Vietnam’s close economic relationship with China, especially as China and Vietnam actively seek to further deepen their trade ties. Vietnam’s manufacturing sector relies heavily on inputs from China, making it “vulnerable to forced labor risks in supply chains.”  Moreover, Commerce itself has raised the alarm about China’s use of Vietnam to circumvent U.S. antidumping duties on Chinese-made products.  

The letter was led by Senator Elizabeth Warren (D-MA) and co-signed by Senators Sherrod Brown (D-OH), Bob Casey (D-PA), Debbie Stabenow (D-MI), Bernie Sanders (I-VT), John Fetterman (D-PA), and Tina Smith (D-MN).

A full version of this letter is available here.

###