The US Trade Representative (USTR) announced in an October 2 release that it is initiating an investigation under Section 301 of the Trade Act of 1974 into two significant issues with respect to Vietnam.
Specifically, the USTR will investigate Vietnam’s acts, policies, and practices related to the import and use of timber found to be illegally harvested or traded, and also will investigate Vietnam’s acts, policies, and practices that could be deemed to contribute to the undervaluation of its currency and the resultant harm caused to US commerce.
The USTR published notices dated October 8 on the two investigations in the Federal Register.
Uncertainty continues to shape the US trade landscape generally, and the potential for imposition of more tariffs looms ahead. As stated above, the USTR investigations are being undertaken under the authority of Section 301 of the Trade Act of 1974, the same provision that the United States employed in its ongoing trade disputes with China, which result in multiple rounds of tariffs on goods from that country. That provision also served as the basis for tariffs against French-origin products scheduled to go into effect on January 6, 2021, announced in response to the French digital services tax.
Should any negative repercussions result from the investigations of Vietnam, it is possible that US trade attention could expand to that theater, with the imposition of additional duties. If so, multinational corporations already operating in Vietnam, along with those that may relocate in response to the current stalemate with China, may find themselves again dealing with tariffs on Vietnam-origin goods.