After a joint statement from the Treasury Department and the State Bank of Vietnam saying the two sides have resolved U.S. concerns over Vietnamese currency policy, U.S. Trade Representative Katherine Tai said she commends Vietnam's commitment to address U.S. concerns in that matter. Vietnam said it does not manipulate its currency for competitive advantage, but rather manages its exchange rate to control inflation and maintain macroeconomic stability, but it will make its actions more transparent, and will allow the dong to move with market fundamentals as long as macroeconomic stability can continue.
Section 301 (too broad)
The Treasury Department and the State Bank of Vietnam announced July 19 that they have “reached agreement to address Treasury’s concerns about Vietnam’s currency practices as described in Treasury’s Report to Congress on the Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States.” While the news release does not explicitly say this resolves the Section 301 investigation over currency at the U.S. Trade Representative, it does say, “Treasury will inform other U.S. government agencies that it has reached agreement with the SBV to address Treasury’s concerns about Vietnam’s currency practices.”
Treasury Secretary Janet Yellen, in a recent interview with The New York Times, suggested that the cost of Section 301 tariffs on Chinese imports wasn't worth the concessions wrung from China in the phase one deal. “Tariffs are taxes on consumers. In some cases it seems to me what we did hurt American consumers, and the type of deal that the prior administration negotiated really didn’t address in many ways the fundamental problems we have with China,” she told the Times.
The American Apparel and Footwear Association asked the Biden administration to bring businesses, shippers and port authorities to the table to find short-term solutions to the shipping crisis.
Seventy-five trade groups, including the American Apparel and Footwear Association, the U.S. Chamber of Commerce, the National Foreign Trade Council and the Oudoor Industry Association, are telling U.S. Trade Representative Katherine Tai that Vietnamese exports should not face tariffs over either currency manipulation or environmental abuses.
A PricewaterhouseCoopers trade and tax expert told an audience at the U.S. Fashion Industry Association Virtual Washington Trade Symposium that while the prospect of trade liberalization in the next few years is low, he does not think that threatened tariffs on apparel and other goods from European countries, Turkey and India will be levied in November, in retaliation for digital services taxes. Scott McCandless, who spoke July 14 at the virtual conference, said that although it will be "a complicated dance both internationally and domestically" to arrive at an agreement on the intertwined issues of minimum corporate taxes and digital services taxes, he thinks it's more likely than not that Congress will pass a tax bill this fall that would give countries the right to levy taxes on multinationals that do business in their countries. If that happens, he said, "The DSTs likely go away, and the proposed tariffs on countries that have DSTs will go away as well."
The following lawsuits were filed at the Court of International Trade during the week of July 5-11
International Trade Today is providing readers with the top stories from July 6-9 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
Revisions to the tariff schedule over the past six months echoed the back and forth between the U.S. and the European Union over retaliatory tariffs under both the Airbus and digital services tax disputes. Provisions for new tariffs were added then suspended, some immediately. Other changes include updates for USMCA tariff-rate quotas, a Section 301 exclusion extension and an extension to Section 201 safeguards on large residential washers.
The U.S. Trade Representative officially suspended the Section 301 tariffs on the European Union and the United Kingdom that were imposed as part of the dispute over large civil aircraft subsidies, it said in a notice released July 8. The U.S. reached deals last month with the U.K. (see 2106170025) and the EU (see 2106150007) to suspend the tariffs for five years. "The beginning of the five-year suspension period is July 4, 2021, with respect to tariffs on goods of the UK, and July 11, 2021, with respect to tariffs on goods of EU member States," the agency said.