USTR requests for comments, “Section 301” investigations of Vietnam

USTR requests for comments, investigations of Vietnam

The Office of the United States Trade Representative (USTR) today released for publication in the Federal Register two notices and requests for comments concerning an investigation under Section 301 of the Trade Act of 1974 regarding certain of Vietnam’s acts, policies, and practices.

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Timber that is illegally harvested or traded

The first notice [PDF 227 KB] announces that the USTR is initiating an investigation of Vietnam’s acts, policies, and practices related to the import and use of timber that is illegally harvested or traded. The USTR seeks comments regarding the investigation—due by November 12, 2020.

As noted in the USTR notice:

  • Exports of wooden furniture to the U.S. exceeded $3.7 billion in 2019 and Vietnam is one of the largest global exporters of wood products.
  • It appears that most timber exported from Cambodia to Vietnam crosses the border in violation of Cambodia’s log export ban.
  • Aspects of the importation and processing of this timber also may violate Vietnam’s domestic law and be inconsistent with the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
  • The USTR is investigating whether Vietnam’s practices related to the import and use of illegal timber are unreasonable or discriminatory and burden or restrict U.S. commerce
  • Comments are requested to address the following:
    • The extent to which illegal timber is imported into Vietnam
    • The extent to which Vietnamese producers, including producers of wooden furniture, use illegal timber
    • The extent to which products of Vietnam made from illegal timber, including wooden furniture, are imported into the United States.
    • Vietnam’s acts, policies, or practices relating to the import and use of illegal timber
    • The nature and level of the burden or restriction on U.S. commerce caused by Vietnam’s import and use of illegal timber
    • The determinations required under section 304 of the Trade Act of 1974, including what action, if any, must be taken

KPMG observation

Taxpayers that import from Vietnam may want to consider assessing their trade footprint and identifying customs duty-savings strategies. 

Valuation of Vietnamese currency

The second notice [PDF 224 KB] announces that the USTR is initiating an investigation of Vietnam’s acts, policies, and practices related to the valuation of its currency. Written comments must be received by November 12, 2020.

The USTR notice provides:

  • Analysis indicates the Vietnamese dong, which is closely tied to the U.S. dollar, may have been undervalued by 7% - 8.4% in 2017 and 2018.
  • Evidence indicates that the Vietnamese government actively intervenes in the exchange market.
  • The investigation will focus on whether Vietnam’s interventions—through the State Bank of Vietnam (SBV)—in exchange markets and other related actions that contribute to the undervaluation of Vietnam’s currency are unreasonable or discriminatory and burden or restrict U.S. commerce
  • Comments are requested to address the following:
    • Whether Vietnam’s currency is undervalued, and the level of the undervaluation
    • Vietnam’s acts, policies, or practices that contribute to undervaluation of its currency
    • The extent to which Vietnam’s acts, policies, or practices contribute to the undervaluation
    • Whether Vietnam’s acts, policies and practices are unreasonable or discriminatory
    • The nature and level of burden or restriction on U.S. commerce caused by the undervaluation of Vietnam’s currency
    • The determinations required under section 304 of the Trade Act of 1974, including what action, if any, must be taken

Background

The USTR last week announced the Section 301 investigation. The USTR release stated that as part of its investigation on currency undervaluation, USTR will consult with the U.S. Department of the Treasury as to issues of currency valuation and exchange rate policy. Read TradeNewsFlash

 

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
Principal
T: 202-533-3247
E: aahanchian@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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