The US may impose tariffs on Vietnamese furniture imports!
According to US media reports on 29 August, two years ago, the US reached an agreement with Vietnam that Vietnam would improve its timber legality certification system and the US would not impose Section 301 tariffs on imports from Vietnam. Currently, the United States is concerned about Vietnam's progress in implementing the agreement, or will begin to impose tariffs.
In October 2020, the Office of the US Trade Representative (USTR) launched a Section 301 investigation into Vietnam's conduct and policies related to imports of timber and wood products. At the time, the USTR said there was evidence that a significant portion of Vietnam's imports of timber and wood products were harvested or traded in violation of Vietnam's domestic laws, the laws of exporting countries, or international rules.
At the time, Vietnam was already one of the world's largest exporters of wood products, with more than $3.7 billion worth of wooden furniture shipped to the U.S. in 2019, and it relied on imports of timber harvested in other countries to feed wood furniture products.
A year later, the two sides reached an agreement under which the U.S. agreed not to implement any Section 301 measures (such as import tariffs).
Vietnam, on the other hand, committed to improving its timber legality assurance system, not using illegal timber (i.e., timber seized for violating domestic or international law) in its supply chain, verifying the legality of timber harvesting regardless of the country to which it exports, and strengthening border customs enforcement management in concert with high-risk source countries.
Recently, officials from both countries held a third meeting with the Timber Working Group, which is responsible for overseeing the implementation of the agreement in question, and a report from the Office of the U.S. Trade Representative (USTR) noted slow progress in the implementation of the Vietnamese side's agreement.
USTR noted that the two sides "discussed related technical and implementation capacity assistance", which may indicate that Vietnam is seeking additional funding and other resources from the United States (or a third party) to fulfil the agreement.
The USTR also highlighted that "the presence of illegally harvested timber in the supply chain can severely impact U.S. workers and businesses that use legal and sustainable methods to produce goods." This message could be an early warning that Vietnam's ability to implement the agreement remains a concern for the U.S., and that the U.S. will take punitive measures if the Vietnamese side does not make sufficient progress.
For now, however, the Office of the U.S. Trade Representative has said only that it "will continue to closely monitor Vietnam's implementation of the timber agreement" and that the U.S. and Vietnam will "continue to work closely together until the fourth meeting of the Timber Working Group."
Previously, the U.S. also ruled that some of the raw materials for Vietnamese furniture are made in China and will be subject to high tariffs!
The U.S. Department of Commerce (DOC) has finally determined that 37 Vietnamese companies exporting hardwood plywood to the U.S. used hardwood plywood raw materials and components from China, and that the products were in fact produced in China, and should be subject to anti-dumping duties and countervailing duties on Chinese hardwood plywood. The United States Department of Commerce ordered the United States Customs and Border Protection (CBP) to impose an anti-dumping duty rate of 183 per cent and a countervailing duty rate of 23 per cent on the 37 companies for the Chinese plywood.
