USTR Initiates Section 301 Investigation on Vietnam

The Office of the U.S. Trade Representative (USTR) announced on October 2, 2020 that a new trade investigation into Vietnam is underway, which focuses on two areas: currency manipulation and timber policy. The first investigation was prompted by determinations in August by the U.S. Treasury and Commerce Departments that Vietnam had manipulated its currency in a specific trade case involving tires.  USTR will determine whether the undervalued Vietnamese Dong hurts U.S. businesses.
Regarding the second issue of Vietnam’s timber policy, there is evidence that much of the timber imported from Vietnam was harvested against the laws of the source country. Reports indicate that a significant amount of the timber exported from Cambodia to Vietnam was harvested on protected lands (such as wildlife sanctuaries) and, therefore, in violation of legal timber concessions. It also appears that most timber exported from Cambodia to Vietnam was traded illegally via border crossings in violation of Cambodia’s log export ban. Additionally, Vietnam’s sourcing of timber from other countries (such as Cameroon and the Democratic Republic of the Congo) may have been harvested in violation of those countries’ laws. USTR will determine the impact of these timber practices on the environment and on workers in the U.S. timber and other industries.
USTR cited its authority under Section 301 of the Trade Act of 1974 as the basis for conducting this investigation, which is the same legal justification that allowed the Administration to impose tariffs on nearly $370 billion annually on imports from China.
For more information about these and other trade developments, please contact a BDO Customs and International Trade Services professional.