America’s largest footwear trade organization has expressed concerns that the cost of shoe imports from Vietnam could skyrocket following reports that the White House is preparing to launch an investigation into the country’s currency practices.
In a statement sent to FN on Friday, Footwear Distributors and Retailers of America (FDRA) president and CEO Matt Priest wrote that the group was “very concerned” by the Trump administration’s potential probe into Vietnam over allegations of currency manipulation. The country is the second largest supplier of shoes to the United States.
“American footwear companies and consumers are already struggling during a time of tremendous economic uncertainty from COVID-19. After the administration hit Chinese-made footwear with added tariffs, U.S. companies had to devote significant resources to shifting supply chains, which takes years of planning and investment,” Priest wrote. “Any action that targets footwear from Vietnam could have a devastating effect on U.S. companies and consumers during a time when they can least afford it.”
The actions against Vietnam would come just over a month after the Departments of Commerce and Treasury found that the country had manipulated its currency in a specific trade case that involved tires. According to a Bloomberg report, an announcement on the investigation could come as soon as this week. Washington will reportedly use Section 301 of the 1974 Trade Act — the law it used to impose tariffs on China, which ultimately launched a protracted trade war between the world’s two largest economies.
As the U.S.-China dispute over tariffs escalated, many manufacturers to relocate some parts of their supply chains to neighboring countries in Southeast Asia. Vietnam has since captured some of that dominant market share and is now one of the U.S.’s top trading partners.
Last month, the Commerce Department reported that the U.S. trade deficit — or the gap between what America purchases and sells to foreign countries — surged to $63.6 billion in July. It was 18.9% higher than the June deficit of $53.5 billion and at its highest level in 12 years. During his presidential campaign in 2016, Trump pledged to lower the country’s largest trade deficits, particularly with China. However, the figures have remained persistently high.