Reject Section 301 Tariffs on Vietnam, More Than 200 CEOs Urge Trump
Section 301 tariffs on Vietnam aren't the answer to curb Hanoi's allegedly unfair devaluation of the dong against the dollar to the detriment of U.S. interests, wrote more than 200 company and trade association CEOs to President Donald Trump Thursday, as posted Friday in docket USTR-2020-0037. Their letter was reflective of widespread fear that the Trump administration will in its final days rush through a Federal Register notice imposing tariffs on Vietnam, even if the duties take effect after Jan. 20.
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U.S. trading partners “must abide by global trade rules,” but “enhanced bilateral engagement” with Vietnam should be the tool deployed to “resolve concerns” about Hanoi's alleged currency manipulation, said the CEOs. Responding with tariffs “would undermine American global competitiveness and harm American businesses and consumers at a time when they can least afford it, as they are struggling from the impacts of COVID-19,” they said. The White House didn't respond to questions Friday.
Thursday was the deadline for rebuttals to testimony given at the Section 301 investigative hearing Dec. 29 (see 2012290034). Only three of 21 witnesses testified in support of tariffs. The CEOs instead used the deadline to urge Trump not to impose “punitive tariffs on goods from Vietnam," saying they were writing “on behalf of the companies we lead and the millions of American workers we employ.”
The CEOs are “particularly concerned” about the threat of Section 301 tariffs on U.S. imports of “apparel, footwear, technology components, luggage and travel goods, furniture, and accessories” from Vietnam, they said. “Imports of these products already face some of the highest duties the U.S. government charges.”
Chief executives from Alpine, AudioControl, Jasco, LG, Samsung, Sony and Voxx were among the tech CEOs signing the letter. CTA CEO Gary Shapiro also signed, as did his counterparts from the Computer & Communications Industry Association, Information Technology Industry Council, Internet Association, National Retail Federation, Retail Industry Leaders Association and Semiconductor Industry Association.
Many companies “shifted sourcing to Vietnam as a direct result” of the administration’s Section 301 tariffs on Chinese imports and the “supply chain diversification efforts” that followed, said the CEOs. “Placing tariffs on imports from Vietnam would punish those companies who made the sourcing shift as the administration had asked.”
Samsung Electronics America urges the Trump administration to “refrain” from imposing Section 301 tariffs on Vietnamese goods, “particularly on those making sizeable U.S. national security and consumer contributions in the 5G technology space, including smartphones and network equipment,” President-CEO Kyungsik Choi, among those signing the letter, commented in a separate posting Friday in the same docket. He wrote to “rebut calls” to impose tariffs from the few witnesses at the Dec. 29 hearing who supported duties.
“Our company has moved a significant portion of its manufacturing operations to Vietnam from elsewhere in the region over the past several years,” said Choi. “We have found Vietnam to be a reliable partner that has welcomed substantial private investment from companies based in advanced industrialized economies like South Korea and the United States.” That the U.S. and Vietnam have built a “deep” security, diplomatic and economic partnership, “in a strategically important region, has buttressed that investment environment for Samsung and other companies,” he said.
Samsung sources “a predominant share” of its smartphones, network equipment and other mobile products from Vietnam, said the CEO. Tariffs on Vietnam imports would jeopardize the U.S. government’s “strategic priority of leading in 5G telecommunications deployment with trusted supply chain partners,” he said. “At a time when the U.S. economy is starting to rebound, tariffs on Samsung’s popular smartphones, tablets, displays, home appliances, memory products, and PCs would be a significant drain on U.S. consumers.” U.S. importers source about a fifth of all smartphones from Vietnam, according to Census Bureau import data (see 2012190001).