USTR Releases Witness List Ahead of Section 301 Hearing on Vietnam Currency Manipulation

The Office of the U.S. Trade Representative released a list of witnesses slated to testify during the Dec. 29 Section 301 hearing on Vietnam currency manipulation. The agency hasn't addressed a request from trade associations that USTR delay the hearing in order to consider a Dec. 16 Treasury Department report blasting the Vietnam government for tampering with the foreign exchange market “in a sustained, asymmetric manner,” to the detriment of U.S. interests. Treasury released the report nearly a week after the deadline passed for submitting requests to appear at the USTR hearing.

The virtual hearing will be a change of pace for USTR, which in the past three years held several rounds of “off-camera” Section 301 hearings about China’s allegedly bad trade behavior, with no video recording or photography allowed. USTR’s Oct. 8 notice initially said it would forgo a hearing in the Vietnam investigation due to COVID-19 complications. That changed in a Nov. 25 notice, when it scheduled the virtual hearing and set a Dec. 10 deadline for filing requests to appear.

Several groups that asked to appear at the hearing urged USTR to do its Section 301 investigation into Vietnam with full “transparency.” The U.S. Court of International Trade received 3,700 complaints alleging USTR ran sloppy lists 3 and 4A tariff rulemakings against China, in violation of the Administrative Procedure Act.

USTR should use “policy tools” other than Section 301 remedies to curb Vietnam’s alleged currency misbehavior, the Information Technology Industry Council said: “If USTR nevertheless decides to continue with its Section 301 investigation, we strongly urge deliberate, thorough, and transparent consideration of these and other stakeholder concerns at each phase of the process.”

Many National Retail Federation members “actively source goods from Vietnam” but believe the value of the dong “has little to no impact on their sourcing decisions and, consequently, U.S. commerce,” the association said in its request to appear. “Any action by the United States to restrict imports from Vietnam as a method of addressing any undervaluation of the dong that may prevail would be wholly unwarranted and harmful.”

Retail Industry Leaders Association members worry tariffs imposed on products from Vietnam “would have a devastating impact on American businesses and families,” said the group, which represents Best Buy, Target, Walmart and other big-box retailers. U.S. importers “heeded” the administration’s call to “diversify supply chains out of China” and “deepened their ties” with Vietnam, RILA said. Imposing tariffs on Vietnamese products now would “slow the migration” of supply chains away from China, it said.

At least three groups or companies plan testimony critical of Vietnam's alleged currency harms, according to their prehearing submissions, including one that explicitly recommended tariffs as the obvious solution. Hanoi’s currency manipulation had a “significant impact” on workers and “their facilities” and hinders the ability of U.S. firms to “compete domestically and globally,” the United Steelworkers said.

U.S. competition in flexible magnet manufacturing “has shifted from China to Vietnam over the past decade,” Magnum Magnetics said. Vietnam's currency practices “harmed the U.S. flexible magnet industry,” it said. Magnum has “remedies” in mind it feels “would be appropriate should USTR's investigation find that Vietnam's currency valuation practices are an actionable offense,” it said. Like the union, it didn't spell out whether those suggested remedies should include tariffs.

A third, more hawkish Vietnam opponent, Caperton Furnitureworks, said tariffs on Vietnamese imports are a well-called-for fix for Vietnam's currency misbehavior, and that the duties can't come a day too soon. Vietnamese imports of wooden furniture to the U.S. are “surging,” said Caperton, which does business as Gat Creek. “To the extent that such import surges are attributable to unreasonable market interventions by Vietnam that contribute to the undervaluation of Vietnam’s currency,” USTR should adopt “appropriate measures,” including the imposition of Section 301 duties, “to address those issues,” it said.