Trump aide tells Vietnam to curb China shipments to avoid duties

US national security adviser Robert O'Brien told Vietnamese leaders they must curb illegal re-routing of Chinese exports and purchase more US goods.
US national security adviser Robert O'Brien told Vietnamese leaders they must curb illegal re-routing of Chinese exports and purchase more US goods.PHOTO: AFP

WASHINGTON (BLOOMBERG) - US national security adviser Robert O'Brien told Vietnamese leaders they must curb illegal re-routing of Chinese exports and purchase more US goods such as liquefied natural gas and military equipment in order to avoid punitive American tariffs.

The Commerce Department this month imposed preliminary anti-subsidy duties on Vietnamese car and truck tires, citing the nation's "undervalued currency" among the reasons.

In an interview with Bloomberg News this weekend during a stop in Hanoi, the aide to President Donald Trump said he told the country's leaders that cracking down on Chinese trans-shipments and easing the US's trade deficit with Vietnam "could be the basis for a reversal" of the tariffs.

The duties have become a sticking point between the US and Vietnam even as the former adversaries strengthen overall ties to counter Chinese actions in the South China Sea.

Mr O'Brien, who met with officials including Prime Minister Nguyen Xuan Phuc and Foreign Affairs Minister Pham Binh Minh, said they were "very concerned" about Chinese actions to prevent Vietnam from tapping into offshore resources such as fish and natural gas.

Mr O'Brien said that Vietnam is interested in more military-to-military information sharing as well as obtaining additional US Coast Guard equipment to better protect maritime areas.

He told them the US may be able to provide financing to help with purchases of the American helicopters to reduce Vietnam's bilateral trade surplus, which is on pace to break last year's record US$56 billion (S$75.14 billion).

Vietnam's Ministry of Foreign Affairs didn't immediately respond to a request for comment.

Mr Phuc last month reiterated that Vietnam doesn't use its currency for a competitive trade advantage during a meeting with Mr Adam Boehler, head of the US International Development Finance Corporation.

Vietnam's government previously has signalled it plans to buy "large volumes" of LNG from the US, while also saying it has intensified efforts to crack down on Chinese exporters trying to route products through the South-east Asian nation to bypass higher US tariffs.

Mr O'Brien said Vietnam is typically cautious with public statements related to China and wants to maintain good relations with their much larger neighbour country.

He also said he believes Vietnam is interested in getting American companies involved in offshore oil and gas projects because they think China would be less likely to interfere in that case.

Vietnam's strategy for standing up to Beijing is to work with other regional countries through the Association of South-east Asian Nations, or Asean, Mr O'Brien said.

But he added that China has some leverage in the organisation through its ally Cambodia.