G7 Finance Minister and Central Bank Governors' Meeting in Stresa

G7 Finance Minister and Central Bank Governors' Meeting in Stresa

Reuters:  U.S. Treasury Secretary Janet Yellen on Thursday said the United States' upgraded partnership with Vietnam does not require Vietnam to sever ties with Russia or China.

Asked whether Russian President Vladimir Putin's state visit to Vietnam to sign a slew of agreements ranging from oil and gas to nuclear science raised concerns for Washington, Yellen said Hanoi has a clear policy of working with many countries.

"Vietnam has a policy and strategy of working collaboratively with many different countries, and it is not a condition of our partnership that they sever their ties to Russia or to China," Yellen told a news conference in Atlanta.

Putin received a 21-gun salute at a military ceremony in Vietnam on Thursday, vowing to build a "reliable security architecture" in the Asia-Pacific region during a two-nation trip to Asia seen as show of defiance to the West.

President Joe Biden and Yellen both visited Vietnam last year as part of a broader push to deepen ties with the Southeast Asian country.

Yellen said Washington had upgraded its relationship with Vietnam and saw it as a partner in its efforts to diversify supply chains and reduce reliance on China, but had not conditioned expanded ties on Hanoi ending ties with Moscow or Beijing.

Data show higher U.S. tariffs on Chinese goods have boosted imports from Vietnam, whose export boom relies on imports from neighboring China for much of its exports, data show.

The surge in the China-Vietnam-U.S. trade has vastly widened trade imbalances, with the Southeast Asian country last year posting a surplus with Washington close to $105 billion - 2.5 times bigger than in 2018 when the Trump administration first put heavy tariffs on Chinese goods.

Yellen said Vietnam was also part of a Just Energy Transition Partnership aimed at reducing global greenhouse gas emissions and the United States was providing financing to help Vietnam reach its objective of lowering emissions over time.

She did not reply to a question about whether Vietnam's closer ties with Moscow would affect an upcoming U.S. Commerce Department decision on whether it should upgrade the Communist-ruled country to market economy status.

The Commerce department is due to decide the issue by July 26. The move, opposed by U.S. steelmakers, Gulf Coast shrimpers and American honey farmers, but backed by retailers and some other business groups, would reduce the punitive anti-dumping duties set on Vietnamese imports because of its current status as a non-market economy marked by heavy state influence.

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