US Businesses Operating in Vietnam Fear Tariffs Coming Before Jan. 20
The head of the American Chamber of Commerce in Vietnam said businesses there don't know whether U.S. Trade Representative Robert Lighthizer will conclude that Vietnam has been a trade cheat through currency manipulation but not put a tariff number on it; put a tariff number but not start collecting; or implement tariffs before the new administration takes over Jan. 20.
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Virginia Foote said on a Washington International Trade Association webinar Jan. 7 that AmCham members expect that, despite many witnesses arguing that Vietnam is not a currency manipulator, USTR will say that Vietnam is harming U.S. commerce with its currency practices. “Why start proceedings on a [Section] 301 case if it’s not a little bit preordained, if Vietnam’s not going to be found guilty,” she said.
Roger Schagrin, the lawyer who is representing the United Steelworkers on a currency manipulation countervailing duty case on Vietnamese tires, said that in his case, the Treasury Department determined that the currency was worth a 5.5% subsidy to the tiremakers. Schagrin said it would make sense if the U.S. government found that all Vietnamese exports are getting a subsidy that large through its currency policy. “We think this is great for workers,” he said. Schagrin said he expects the USTR will complete its report before Jan. 20, but doesn't think any tariff action will happen, especially since the president would have to authorize whatever recommendation USTR makes.
Foote said USTR has promised that if certain Vietnamese exports face Section 301 tariffs, stakeholders will have the opportunity to comment before the tariffs are levied. But she said that if all exports are taxed, it could be implemented. She said her members are speculating about whether the USTR would tax those exports at 8%, 10% or 25%. She said that if it's 8% or 10%, she doesn't expect the new USTR to make rescinding the tariffs a priority.
Schagrin agreed that a skirmish with Vietnam would not be Katherine Tai's top priority. “I would be shocked if the first item on Ambassador Tai’s agenda isn’t trying to resolve Boeing-Airbus,” he said. Europe is a much bigger trading partner than Vietnam, he noted.
Foote said that at first, “a lot of us thought this maybe isn’t going to happen quickly or it’s not that serious,” but that the mood in Hanoi has changed. “The sense is that this is extremely serious, that the tariffs could be assessed, and that the whole thing could happen very quickly,” she said.
While Schagrin did not specifically endorse countrywide tariffs over currency, he praised Trump's willingness to confront the issue, saying it was a huge mistake for the U.S. to allow China to undercut so many small manufacturers for decades as long as Boeing was able to keep building its export markets.
Lisa Handy, a senior policy adviser for the Environmental Investigation Agency, also did not endorse tariffs to solve the problem of timber trafficking in Vietnam. Instead, she said, requiring furniture importers to make Lacey Act declarations, and consulting with Vietnam, as Europe has, would be more effective.
American Apparel and Footwear Association CEO Steve Lamar moderated the discussion, but also noted that his trade group testified in the Section 301 case. “Our industry would be devastated” if the apparel, footwear and travel goods it imports were subject to higher tariffs over either timber or currency, he said.