Leibowitz on Trade: U.S., Vietnam Currency Deal Means 'Worry Less' About Steel

The Biden administration has resolved, at least in part, a potentially serious conflict over currency exchange rates with Vietnam. This could be a signal that other trade problems might also be resolved.

Exchange rates matter to economists and businesses, and therefore to the rest of us, because a “weak” currency abroad will facilitate exports to countries with “strong” currencies. If the Vietnamese dong declines in value against the U.S. dollar, Vietnam’s exports to the U.S. will be cheaper. Vietnam has exhibited a weakening currency against the U.S. dollar in recent months, which helped Vietnam increase exports to the United States by 77% in the last two years – while U.S. exports to Vietnam stayed relatively flat.