WASHINGTON, D.C. – In response to a directive from President Donald Trump, the Office of the U.S. Trade Representative is initiating a Section 301 trade investigation into Vietnam, focusing on its alleged use of illegal timber and other practices that may harm U.S. commerce.
A key aspect of the investigation will focus on Vietnam practices or policies that may contribute to the undervaluation of its currency as well as the resulting negative effects that is having on the U.S. economy.
It will conduct the investigation under Section 301 of the 1974 Trade Act and will consult with the Department of the Treasury relating to the issues of currency valuation and exchange rate policy.
“President Trump is firmly committed to combatting unfair trade practices that harm America’s workers, businesses, farmers and ranchers,” said U.S. Trade Representative Robert Lighthizer. “Using illegal timber in wood products exported to the U.S. market harms the environment and is unfair to U.S. workers and businesses who follow the rules by using legally harvested timber.
“In addition, unfair currency practices can harm U.S. workers and businesses that compete with Vietnamese products that may be artificially lower-priced because of currency undervaluation. We will carefully review the results of the investigation and determine what, if any, actions it may be appropriate to take.”
The USTR said it will issue two separate Federal Register notices this week to provide details of the investigation and information on how members of the public can respond through written submissions.
The effect on the furniture industry is unclear at this early stage. However, any resulting tariffs on finished goods could have a daunting impact given the amount of finished goods Vietnam ships to the U.S. market.
In 2019, Vietnam shipped nearly $5.7 billion in furniture and bedding to the U.S. market. This was up 35% from the $4.2 billion shipped the year before.
Much of this had moved to Vietnam due to China tariffs. Its shipments were down 28% to $9.7 billion, from $13.5 billion the year before.
I’m Tom Russell and have worked at Furniture/Today since August 2003. Since then, I have covered the international side of the business from a logistics and sourcing standpoint. Since then, I also have visited several furniture trade shows and manufacturing plants in Asia, which has helped me gain perspective about the industry in that part of the world. As I continue covering the import side of the business, I look forward to building on that knowledge base through conversations with industry officials and future overseas plant tours. From time to time, I will file news and other industry perspectives online and, as always, welcome your response to these Web postings.