In the final days at the White House, President Donald Trump has opted against slapping levies on Vietnam goods — a decision cheered on by the footwear industry.
Today, the Office of the United States Trade Representative released the findings of its Section 301 investigation into the Southeast Asian country’s currency practices, which was initiated in October. It said that, while Vietnam’s actions to push down the value of its currency were “unreasonable” and “burden or restrict U.S. commerce,” it would not impose punitive tariffs on imports.
“Unfair acts, policies and practices that contribute to currency undervaluation harm U.S. workers and businesses and need to be addressed,” U.S. Trade Representative Robert Lighthizer said in a statement. “I hope that the United States and Vietnam can find a path for addressing our concerns.”
It added that it would “continue to evaluate all available options” — a process that would pass on to the administration of President-elect Joe Biden, who takes office on Wednesday.
The Footwear Distributors and Retailers of America applauded the decision. President and CEO Matt Priest, who testified last month in opposition to the tariffs on Vietnamese-made shoes, wrote to FN, “The industry can now turn its attention towards advocating for more consumer-focused policies with the incoming Biden administration.”
He added, “At the end of a tumultuous and uncertain time for those of us who value global trade and the ability of American footwear companies to sell products far and wide, my hope is that this advocacy win will turn into a more stable and predictable environment for our members in the months and years to come.”
The announcement came a week after executives from major retail companies penned a letter urging Trump not to slap punitive tariffs on products coming from Vietnam. Over the past several years, a number of apparel and footwear companies have been steadily moving production out of China amid rising labor costs and the escalation of the Washington-Beijing trade war. Today, Vietnam is considered the second largest supplier of shoes, clothing and travel accessories to the U.S. market.
According to the American Apparel and Footwear Association, 24.4% of all U.S. shoe imports came from Vietnam during the January through October 2020 period. During that same timeframe, U.S. imports of clothing and travel goods from the country represented a respective 16.5% and 19.1% of all imports. The industry also saw the average import price in Vietnam increase last year: For footwear, it was $14.34 — double China’s average import price for the first 10 months of the year.
Experts have suggested that there aren’t many other sourcing options for apparel and footwear outside of Vietnam and China, which have developed the infrastructure, factories and workforce necessary to manufacture shoes and clothing on a scale demanded by American consumers — that is, 2.4 billion pairs of shoes a year or 7.4 pairs for each person, as reported by the FDRA.