USTR Launching Two Section 301 Investigations on Vietnam
The Office of the U.S. Trade Representative is considering sanctions against Vietnam for importing illegal lumber to use in wood furniture and for currency manipulation that it suspects is hurting U.S. industry. The Section 301 investigations, announced the evening of Oct. 2, invite public comment on the extent of the violations, the scope of its impact on U.S. commerce, and suggestions for how to respond. Comments are due by Nov. 12.
The notices say that in 2019, Vietnam exported $3.7 billion worth of wooden furniture, and that there's evidence that Vietnamese customs officials don't record the origin of timber coming in from Cambodia. “Available evidence suggests that a significant portion of that imported timber was illegally harvested or traded,” USTR said. The office said reports say much of the Cambodian timber was harvested outside of legal timber concessions, including in wildlife sanctuaries. The USTR also suggests Vietnam is importing wood from Cameroon and the Congo, which also may be illegally harvested.
The Section 301 investigation on currency undervaluation says that the U.S. analysis indicates that the dong was undervalued by 7% in 2017 and 8.4% in 2018, and that undervaluation continued in 2019. It asks that comments on how undervaluation affects U.S. commerce should be submitted at docket number USTR-2020-0037.
The American Apparel and Footwear Association expressed alarm that there could be duties on Vietnamese imports as a result of these investigations. “Vietnam is an important trading partner for the U.S. apparel, footwear, and travel goods industry, and has become even more important as U.S. companies have implemented diversification strategies away from China,” AAFA CEO Steve Lamar said in a statement issued Oct. 5. “Imposing new punitive tariffs on imports from Vietnam would cause extreme disruption, directly threatening those investments and increasing prices for hard-working American families at the register or costs on the supply chains that directly support millions of U.S. jobs.”
Lamar said companies are still recovering from the impacts of the COVID-19 pandemic, so this is a particularly poor time to raise taxes on Vietnamese imports. Vietnam is the second-largest supplier of apparel and shoes, AAFA said.