The SFIA, OIA, SIA, FDRA, and AAFA were among 76 trade associations that sent a letter to U.S. Trade Representative Katherine Tai urging the Biden administration not to add more tariffs 301 and instead use other tools, such as Treasury Department-led financial diplomacy, to pressure Vietnam over currency issues.
With the one-year deadline to complete the two investigations into Vietnam’s potential undervalued currency and illegal logging practices in less than three months and still unresolved, âthe business community is increasingly concerned. by the fact that the USTR may soon publish a list of Vietnamese exports that could be hit with 301 tariffs, âthe organizations said.
The full letter reads as follows:
July 14, 2021
The Honorable Katherine Tai
United States Trade Representative
600 17th Street NW Washington, DC 20508
Dear Ambassador Tai:
The undersigned organizations are writing today to express concerns over persistent reports that the Office of the United States Trade Representative (USTR) may soon release a list of imported goods from Vietnam from which the Biden administration is proposing to collect charges. Section 301 tariffs pursuant to âCurrency Manipulation Investigationsâ and âIllegal Timber.â We urge the USTR not to do so for either investigation.
The Congress-commissioned âReport on the Macroeconomic and Exchange Rate Policies of the United States’ Major Trading Partnersâ released in April concluded that there is âinsufficient evidenceâ that Vietnam is manipulating its currency. exchange rate. Instead, the Treasury promised “enhanced engagement” with Vietnam. Such engagement offers significant benefits: Financial diplomacy can help finance ministries and central banks alleviate imbalances and work together to guard against balance of payments problems.
Imposing Section 301 tariffs at a time when the Treasury recently said Vietnam does not manipulate its currency would undermine efforts to develop a more cohesive framework for financial diplomacy. Such a move would confuse foreign governments, which is understandable – and less likely to heed Washington’s advice.
At this point, the IMF’s July 1 âclosing statementâ of its 2021 Article IV mission to the United States warned of âthe entanglement of trade and monetary issues,â including the Section 301 investigation into Vietnam’s alleged monetary practices. He states in part: âTreating currency undervaluation as a subsidy to be offset raises concerns in both the financial and trade spheres and risks increasing trade tensions and retaliation (with other countries reproducing a similar approach, perhaps using their own standards and methodologies)â¦. Instead, the United States should work constructively with its trading partners to better address the underlying macro-structural distortions that affect external positions. “
In addition, the ongoing investigation into the use of illegally harvested timber raises questions. We believe that an investigation by the Animal and Plant Health Inspection Service under the Lacey Act would be the most appropriate tool to use and not a Section 301 investigation.
The increase in imports from Vietnam in recent years is largely an artefact of the United States’ application of substantial Section 301 tariffs on hundreds of billions of dollars of imports into from China. This has led importers to look to Vietnam, perhaps more than any other country in Asia, as a reasonable and trustworthy alternative to China. The imposition of Section 301 tariffs on goods from Vietnam in either investigation would be a particular response to developments that are, in a sense, the hoped-for result of US policy. In addition, imports of raw materials and industrial components are essential inputs used by US manufacturers of finished goods, and Section 301 tariffs on these products would undermine the competitiveness of US manufacturers. Additionally, it would create further disruption to the global supply chain during one of the world’s worst logistics crises by increasing costs for American workers, families and businesses.
In addition, Vietnam is a major export market for job-creating US manufacturing industries such as textiles, chemicals, hardwood, aerospace, and environmental and energy products as well as major agricultural products. Vietnam’s raw material imports are essential inputs used by US manufacturers of finished goods. These US exports will almost certainly be subject to retaliatory tariffs if the Administration imposes tariffs on Vietnamese products.
Indeed, Vietnam has become a valuable partner of the United States in the context of the difficult relations between the United States and China and more broadly. Since the normalization of US-Vietnamese relations more than two decades ago, several US administrations have favored closer ties with a voluntary partner in Vietnam. If the United States were to impose Section 301 tariffs on goods from Vietnam, the Biden-Harris administration’s efforts to strengthen alliances and partnerships in the Indo-Pacific region would suffer a serious setback .
A strong relationship with Vietnam is an important part of the administration’s efforts to address geostrategic challenges and reaffirm U.S. diplomatic and economic leadership in the region. If the administration has concerns about elements of the US trade relationship with Vietnam, then an undertaking is required – no more tariffs.
Thank you for considering our views. We are ready to engage with you and your team on these important issues.
American Seed Trade Association
American Soy Association
Automobile maintenance association
New England Business Coalition for Commerce
Columbia River Customs Brokers and Forwarders Assn.
Computer Technology Industry Association (CompTIA)
Consumer Technology Association
Fashion Designers Council of America CropLife America
Customs brokers and freight forwarders Assn. from Washington State
Northern California Customs Brokers and Freight Forwarders
Association of Experiential Designers and Producers (EDPA)
Flexible packaging association
Footwear Distributors and Retailers of America (FDRA)
Gemini Chargers Association
Agricultural Transport Coalition
ALTI (International Association of Audio and Speaker Technologies)
American Apparel and Footwear Association
American Association of Exporters and Importers
American Association of Port Authorities
American Bridal and Prom Industry Association
American Chamber of Commerce in Hanoi (AmCham)
American Chamber of Commerce
American Association for Clean Energy Vietnam
American Down and Feather Council
American Alliance for Home Furnishings
American Lighting Association
Global Trade Alliance
Halloween and Costumes Association
Home Fashion Products Association
Home furnishing association
International Household Goods Association
International Wood Products Association
Internet Association (AI)
Association of Manufacturers of Products for Minors
American Leather and Leather Council
Los Angeles Customs Brokers and Freight Forwarders Assn.
Delaware River and Bay Marine Exchange
Maryland Retailers Association
Missouri Retailers Association
Motorcycle Industry Council
National Association of Chemical Distributors (NACD)
National Association of Confectioners National Institute of Fisheries
National Council for Foreign Trade
National Marine Manufacturers Association National Council of Pork Producers
National Association of Restaurateurs
National Retail Federation
National Association of Ski and Snowboard Retailers
National Sporting Goods Association North American Food Association
Equipment manufacturers (NAFEM)
Outdoor Industry Association
Pacific Coast Council of Customs Brokers and Freight Forwarders Assn.
Personal Care Products Council
International plumbing manufacturers
Association of promotional products
International Association of Off-Road Recreational Vehicles
Association of Retail Industry Leaders
San Diego Customs Brokers and Forwarders Assn. SEMI
Snow Sports Industries America
Specialized Equipment Market Association
American Institute of Specialized Vehicles
Sports and Fitness Industry Association (SFIA)
Telecommunications Industry Association (TIA)
Texas Retailers Association
The Jewelry and Fashion Accessories Trade Association
The association of the toy
Association of travel articles
American Chamber of Commerce
American Fashion Industry Association
United States Global Value Chains Coalition
United States Council for International Trade
cc: The Honorable Janet Yellen, Secretary of the Treasury, The Honorable Gina Raimondo, Secretary of Commerce
The Honorable Antony Blinken, Secretary of State, The Honorable Tom Vilsack, Secretary of Agriculture, The Honorable Jake Sullivan, National Security Advisor, The Honorable Brian Deese, Director of the National Economic Council