Section 301 Investigation Witness List Heavily Stacked Against Vietnam Import Duties
The 22-person witness list for the Dec. 29 virtual Section 301 investigative hearing into allegations that Vietnam deliberately undervalued its currency to thwart U.S. economic growth is stacked heavily with people on record as opposing remedial tariffs on Vietnamese imports. Prehearing submissions in docket USTR-2020-0037 foretell some will also testify that the Office of the U.S. Trade Representative is singling out the wrong country for Section 301 currency manipulation review and is doing so for ulterior motives.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Witnesses will have five minutes each to testify, plus take questions from the interagency USTR organizing committee. Post-hearing rebuttals are due Jan. 7, stoking fears among many tariff opponents that USTR may try to rush through a Section 301 notice imposing tariffs on Vietnamese imports, even if the duties were to take effect after President Donald Trump leaves office. USTR didn't respond to questions.
Several witnesses plan to suggest at the hearing that USTR’s true motivation in the Section 301 probe is to punish Vietnam for its growing trade surplus with the U.S., the record shows. Their argument: The Trump administration itself is responsible for that burgeoning trade imbalance because its Section 301 tariffs on Chinese imports chased U.S. import sourcing from China to Vietnam the past three years. The stakes are high if Vietnamese import tariffs are on the table because Vietnam plays a significant and growing role in the U.S. consumer tech supply chain. It generates a fifth of all smartphone imports to the U.S., compared with a single-digit percentage share in 2017.
The first two witnesses USTR will hear from represent the only companies advocating for keeping Vietnam tariffs on the table. Magnum Magnetics President Mark Bradley (see 2012240006) will testify how Vietnam's currency practices “have harmed the U.S. flexible magnet industry,” according to Magnum’s prehearing comments. Bradley will discuss “the remedies Magnum feels would be appropriate should USTR's investigation find that Vietnam's currency valuation practices are an actionable offense.” Flexible magnets are used in a wide variety of consumer and industrial applications.
Caperton Furnitureworks CEO Gat Caperton will follow Bradley with a more explicit call for Vietnam tariffs. His 25-year-old wooden-furniture manufacturing company is struggling to compete against a rising “surge” of cheaper Vietnamese imports, Caperton told USTR this month. “To the extent that such import surges are attributable to unreasonable market interventions by Vietnam that contribute to the undervaluation of Vietnam's currency, the government should adopt appropriate measures, including the application of section 301 duties, to address those issues.”
The Consumer Technology Association, the Information Technology Industry Council and the Semiconductor Industry Association are tech groups strongly on record as opposing Vietnam tariffs, and all will testify to that effect at the hearing. General Electric also fears tariffs on Vietnam likely “will lead to Vietnamese retaliation against U.S. exporters,” James Renigar, managing director-global government affairs & policy, will testify. Section 301 tariffs in this case would also “undermine U.S. relations with Vietnam, an increasingly critical strategic partner in Southeast Asia.”
All business groups scheduled to speak at the hearing are previously on record as solidly anti-tariff on the Vietnam issue. “Punitive tariffs” on Vietnam “will damage the overall U.S.-Vietnam relationship, which is vital to the U.S. national economic interest,” US-ASEAN Business Council CEO Alexander Feldman will testify. Imposing tariffs as the result of the Section 301 investigation “could create a more challenging environment for US businesses that operate in, and trade with, Vietnam,” according to Virginia Foote, chair of the American Chamber of Commerce in Hanoi, who will also testify.