The Office of the United States Trade Representative (USTR) has initiated investigations on two trade-related issues with respect to Vietnam under Section 301 of the Trade Act of 1974 (Section 301). The investigations, which were announced on October 2, 2020, will cover Vietnam’s acts, policies, and practices related to (1) the import and use of timber that is illegally harvested or traded, and (2) the undervaluation of its currency, and the resulting harm to US commerce.
The initiation notice concerning Vietnam’s allegedly illegal timber practices cited Vietnam’s position as “one of the world’s largest exporters of wood products, including to the United States” and evidence that “much of the timber imported by Vietnam was harvested against the laws of the source country.” The source countries specifically identified in the notice were Cambodia and the Democratic Republic of the Congo (DRC). The investigation will focus on whether Vietnamese imports of illegal timber are inconsistent with Vietnam’s domestic laws, the laws of the exporting countries, or international rules and whether Vietnam tacitly supports the import and use of illegal timber. Comments on these and other topics, including what, if any action should be taken by the US Government, may be submitted electronically (Docket No. USTR–2020–0036) by November 12, 2020. USTR will not be holding a public hearing with respect to this investigation.
The initiation notice concerning Vietnam’s acts, policies, and practices related to the undervaluation of its currency cited available information suggesting that Vietnam’s currency (the Dong) has been undervalued for at least the past three years. USTR is seeking comments on whether and the extent to which Vietnam’s currency is undervalued; Vietnam’s policies that contribute to the undervaluation of its currency and whether they are unreasonable or discriminatory; whether US commerce has been burdened or restricted by the undervaluation of Vietnam’s currency; and what, if any action should be taken by the US Government. Comments may be submitted electronically (Docket No. USTR–2020–0037) by November 12, 2020. USTR will not be holding a public hearing with respect to this investigation.
The initiation of these investigations by USTR reflects the Trump Administration’s continued use of Section 301 to address allegedly unfair trade practices by US trading partners. Since 2017, the Trump Administration has relied on Section 301 to investigate measures ranging from China’s technology and intellectual property policies to the promulgation of digital services taxes by a number of countries. If USTR concludes that Vietnam’s policies are unreasonable or discriminatory, and burden or restrict US commerce, the President will be empowered to take remedial action, including, potentially, the imposition of tariffs and/or other restrictions on imports of Vietnamese goods and services. Accordingly, companies that import merchandise form Vietnam – and especially companies that import wood products (e.g., lumber, furniture, etc.) – should consider submitting comments, or at a minimum, monitoring this proceeding closely.