International, Tariffs

Sec. 301 Investigation Focused On Vietnam Will Affect Furniture Imports & Potentially Many Other Products

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Ever since the Trump Administration implemented Sec. 301 duties against all manner of products from China, there has been a noticeable shift in production from China to other countries, most notably Vietnam and India.  This shift has now resulted in a renewed focus on Vietnam for possible trade action very similar to what has been happening with China for the past few years.
The US Trade Representative (USTR) has initiated a Sec. 301 investigation related to the use of restricted wood products used by Vietnam in the production of furniture and other items.  The prohibited wood is allegedly being brought from Cambodia, in violation of Cambodia's own export regulations, and with the tacit approval from the Vietnamese government who is not requiring the appropriate documentation for these shipments certifying both the origin and genus/species of the wood being used.  This wood is then used to produce the furniture, etc. being later exported to the US and other countries.  By not requiring this documentation, Vietnamese manufacturers can disclaim any knowledge of the prohibited wood as they export their products to other countries, particularly the US.
A separate Sec. 301 investigation has also been initiated by the USTR related to direct currency manipulation by Vietnam that has resulted in an effective devaluation of the Vietnamese Dong by approximately 8%, making products from Vietnam less expensive than would otherwise be justified.  If the above is confirmed by the USTR investigation, the remedies and retaliatory actions by the US would be focused on a variety of products, much like the Sec. 301 actions against China have been.  
The USTR is accepting comments on these investigations until Nov. 12.  Directions for filing comments are included in the notices referenced above.  
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