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Vietnam Deal Dodges New Fashion Tariffs

The American Apparel & Footwear Association (AAFA) hailed an agreement with Vietnam announced Friday by U.S. Trade Representative Katherine Tai that addresses U.S. concerns in the Vietnam Timber Section 301 investigation and USTR’s threat of tariffs on products such as apparel and footwear.

This is the first 301 investigation to address environmental concerns. The agreement secures commitments that will help keep illegally harvested or traded timber out of the supply chain and protect the environment and natural resources.

“I commend Vietnam for its commitment to address our concerns regarding the importation and use of timber that is illegally harvested or traded,” Tai said. “With this agreement, Vietnam will provide a model both for the Indo-Pacific region and globally for comprehensive enforcement against illegal timber.”

Tai said USTR’s first use of Section 301 in this investigation shows the strength of using this tool to address concerns regarding environmental risks or the enforcement of environmental laws.

“We are pleased to see that U.S. apparel, footwear, and accessories imports from Vietnam will not be subjected to additional tariffs,” AAFA president and CEO Steve Lamar said. “At a time when we are focusing on getting more vaccines to this key trade partner and unlock snarled supply chains, removal of this tariff threat is welcome indeed. We are also pleased to see Vietnam and the U.S. solidify their work to guard against illegal timber harvesting an important step for Vietnam’s sustainability journey.”

Lamar said as the second largest supplier of apparel, footwear and travel goods to the U.S. market, Vietnam has experienced dramatic growth since 2016. Additionally, Vietnam has become an important supplier of personal protective equipment (PPE).

“All tariff relief and removal of tariff threats is good trade policy, as taxing Americans to get dressed each day is never a good negotiating tactic,” he added.

AAFA has also continuously pressed the Biden administration for additional Section 301 tariff exclusions and retroactive renewal of all expired exclusions. Last week, AAFA penned a letter to Tai on this issue and the simultaneous shipping crisis causing out of control freight rates, historic logjams at U.S. ports, delays, and costs that are wreaking havoc on supply chains and America’s economic recovery.