Fears of New Tariffs On Vietnam Loom in Washington
Even with Washington in crisis and calls for President Donald Trump’s removal growing louder after he incited a mob to attack Capitol Hill, one more trade battle looms.
A group of more than 200 chief executive officers sent a letter to Trump imploring his administration to not impose new tariffs on imports from Vietnam.
Among the ceo’s and executives signing on were Capri Holdings’ John Idol, Gap Inc.’s Sonia Syngal, Levi Strauss & Co.’s Chip Bergh, Nike Inc.’s John Donahoe, PVH’s Manny Chirico, Ralph Lauren Corp.’s Patrice Louvet, Tapestry Inc.’s Joanne Crevoiserat, Tory Burch and Under Armour Inc.’s Patrik Frisk.
The administration started investigating Vietnam’s practices in the timber industry in October and last month officially called the country out for manipulating its currency to benefit its own industry.
While the clock is running down on Trump one way or another, companies are worried that any new tariffs could stick, at least for a while.
“We agree that our trading partners must abide by global trade rules, and we support enhanced bilateral engagement with Vietnam to resolve concerns,” the letter said. “However, 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.”
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Vietnam is the second-largest apparel importer to the U.S., accounting for 16.4 percent of all shipments, and has been a key destination for brands looking to avoid Trump’s trade war tariffs on China, which still accounts for 36.6 percent of all apparel imports.
“If additional tariffs are applied to U.S. imports from Vietnam, it would mean that more than half of all apparel and footwear and more than three quarters of all accessories sold in the U.S. would be hit with cumulative tariffs as high as 25 to 50 percent,” the letter said.
Trade groups such as the American Apparel & Footwear Association, whose ceo Stephen Lamar signed onto the letter, have been pushing back against the prospects of new tariffs.
“The administration is clearly trying to finish an investigation before the 20th of January,” Lamar said, referring to the date President-elect Joe Biden will be sworn in. “This is an investigation that came out of nowhere, it’s been accelerated, it’s been expedited. The process is really frustrating to a lot of people, both trade policy professionals as well as the industry. This would be a real punch in the gut if it were to happen. The big concern is the administration may end up imposing tariffs.”
Although Biden could undo the tariffs after taking office, officials could always decide to leave them in place. And even if they do want to walk back the duties, Biden and team are clearly going to have a lot on their plate.
As Lamar said, “Is it going to be the first order of business to undo this?”
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