WASHINGTON – Today, global tech trade association ITI urged the U.S. government to avoid use of tariffs and rely on other existing policy mechanisms to address any potential substantive concerns identified by the Office of the U.S. Trade Representative’s (USTR) in its Section 301 investigation into Vietnam’s currency valuation. In comments submitted as part of the investigation’s public consultation, ITI underscored that the potential use of tariffs or other trade remedies under Section 301 in this context could have a negative impact on international supply chains and harm the ability of U.S. companies to compete globally.
“Vietnam is a key regional partner of the United States, and ITI supports bilateral engagement that recognizes that reality, including through efforts to increase regulatory compatibility and reduce barriers to trade. It is our view that the potential use of trade remedies under Section 301 in this context would fail to account for the realities of the global marketplace, detract from the realization of broader U.S. strategic objectives in the region, and exacerbate unpredictability in a supply chain environment already contending with the challenges of the pandemic and in which companies are recalibrating and diversifying supply chains in the region.”
“At a time when policymakers, companies, and non-government stakeholders have coalesced around the need for secure and resilient supply chains, Vietnam is strongly positioned to play a leading role in that evolving ecosystem given its strong capabilities in technology manufacturing. Furthermore, where U.S. firms are already seeking to diversify their operations outside of China, the USG should take particular care to ensure that measures that may influence these business investment decisions are undertaken in a coordinated, strategic manner that takes into account the impact of such policies on the ability of U.S. technology firms to compete globally.”
ITI strongly encouraged USTR to consider bilateral engagement to resolve any substantive concerns around Vietnam’s macroeconomic and foreign exchange policies. In addition, ITI asked USTR to schedule a public hearing to ensure that the fullest range of stakeholder input is considered in its investigation.
Sections 301-310 of the Trade Act of 1974, commonly referred to as Section 301, provide USTR with legal authority to enforce trade agreements, resolve trade disputes, and open foreign markets to U.S. goods and services. Once the U.S. government initiates a Section 301 investigation, USTR seeks a negotiated settlement with the country concerned. Absent agreement on an acceptable solution, and where a country’s obligations under a trade agreement are implicated, the law requires that USTR bring a formal dispute under that trade agreement. In other instances, Section 301 provides USTR with the authority to impose trade remedies on economies that it deems to be implementing unfair trade practices.