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U.S. decides to suspend tariffs on imports from Vietnam

U.S. decides to suspend tariffs on imports from Vietnam

The United States has decided to suspend the imposition of tariffs on imports from Vietnam, thereby reducing the burden on Vietnamese footwear and apparel brands and retailers.

Recently the U.S. Trade Representative's Office (USTR) announced the results of its Section 301 investigation into Vietnam's exchange rate manipulation, saying that the acts, policies, and practices adopted by Vietnam, including excessive intervention in the foreign exchange market and other related measures, were unreasonable and an impediment to U.S. trade.


U.S. Trade Representative Robert Lighthizer said the unfair acts, policies, and practices that led to the devaluation of the currency hurt U.S. labor and businesses and need to be addressed. I hope the United States and Vietnam can find solutions to their mutual concerns.

USTR is not taking any specific action on the findings of the investigation report at this time, but will continue to evaluate the various options available. The Section 301 investigation into Vietnam's illegal importation of third-country wood for processing into furniture and other wood products for export to the United States is still ongoing.

Steve Lamar, president and CEO of the American Apparel and Footwear Association, said the tariff increase was never a good time, but would be particularly harmful because all Americans and this industry continue to be affected by COVID-19.

Tariffs are imposed on American consumers, American workers and American businesses. This is already evident in the U.S.-China trade war. Vietnam is an important trading partner, especially as companies try to rebalance their purchases from outside of China. Imposing tariffs on imports from Vietnam would be detrimental to all efforts and investors.

We look forward to continuing our dialogue with USTR under the leadership of the new Trade Representative, Katherine Tai, and the Biden Administration to seek remedies with Vietnam, he added.

A letter signed by 200 companies and trade association executives from many industries has been submitted to USTR for a 301 hearing on Vietnam's currency operations and urges the U.S. government to avoid using tariffs as a remedy in the investigation.

If the U.S. imposes tariffs on imports from Vietnam, it means that more than half of the apparel and footwear products and more than 3/4 of the accessories sold in the U.S. will be affected, with cumulative tariffs of up to 25-50%.

Many companies, including Nike and adidas, have turned to Vietnam for sourcing as a direct result of China's 301 tariffs and supply chain diversification. Lower wages and a vertically integrated supply chain make Vietnam increasingly attractive to buyers.

Vietnam is the second-largest supplier of apparel, footwear and travel goods to the U.S. It is also a major supplier of raw materials used by U.S. manufacturers and a major market for U.S. textile and chemical exports.

According to the U.S. International Trade Commission, U.S. textile and apparel exports to Vietnam have added $97 million since 2015-2019. Meanwhile U.S. footwear exports to Vietnam added $170 million.