Citing Currency Manipulation, United States Places Tariffs On Vietnamese Tires
Citing an “undervalued currency,” the U.S. Department of Commerce (DOC) announced last week that it will impose tariffs ranging from 6.2 percent to 10.1 percent on vehicle tires from Vietnam.
The decision is the first time the DOC has made an affirmative countervailing duty determination in response to a country’s currency practices and it comes after an August 2020 report from the U.S. Department of the Treasury that found Vietnam had manipulated its currency in at least one case involving the export of light vehicle tires.
The United States imported nearly $470 million worth of passenger tires from Vietnam in 2019.
The department is scheduled to announce its final determination in this case on or before March 16, 2021. While this decision does not impact metals products, it could set an important precedent since the Office of the U.S. Trade Representative is also conducting an investigation into Vietnamese trade practices that could result in even more duties.
Indeed, in a statement, U.S. Commerce Secretary Wilbur Ross said, “Today’s preliminary determination represents an important step forward for the America First trade agenda.” The DOC also noted, “Foreign companies that receive financial assistance from foreign governments that benefit those companies’ production of goods and are limited to specific enterprises or industries, or are contingent upon export performance or upon the use of domestic goods over imported goods, are subject to countervailing duties.”