Administration May Take Action on Vietnam

According to published reports, the Trump Administration may soon launch a Section 301 investigation into Vietnam over allegations of currency manipulation. The Administration previously used its Section 301 authority in 2018 and 2019 to hit Chinese-made goods, including footwear, with new added tariffs. Using tariffs to address currency manipulation, however, would be a major expansion of this tool. The move comes at a time when the U.S. trade deficit has reached $64 billion, the highest in 12 years.  FDRA President & CEO Matt Priest made the following statement: FDRA is very concerned by reports that the Trump Administration is looking at possible actions on Vietnam. 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. Today, Vietnam is the second largest supplier of shoes to the U.S. 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.

China Update: Additional Uyghur Legislation

This week, the House of Representatives passed another bill in response to serious human rights allegations against China involving its minority Uyghur population. The legislation would directly impact U.S. companies. The Uyghur Forced Labor Disclosure Act (H.R. 6270): PASSED HOUSE. This legislation would require publicly traded companies importing from the Xinjiang Autonomous Region to disclose information about their supply chains. This would apply to manufactured goods imported from this region, including textiles and shoes, as well as materials sourced from the region. When it was introduced, the bill’s author Rep. Jennifer Wexton (D-VA) said, “Once consumers see that the products we use every day – from the shoes we wear to the phones we text on – have been tainted by forced labor, I believe American companies will do the right thing and rethink their supply chains.” The House passed the bill Wednesday by a vote of 253 to 163, and it now heads to the Senate. You can view more on the bill here.

The Uyghur Forced Labor Prevention Act (H.R. 6210): PASSED HOUSE. This legislation would require companies to provide clear and convincing evidence that any product imported from the Xinjiang Autonomous Region is not made with forced labor. Without such evidence, the imports would be banned under the forced labor statute (USC § 1307). This would create a “rebuttable presumption” that any good made in this region or made by persons working with the government for purposes of “poverty elimination” or “pairing assistance” is not entitled to entry. The House passed the bill last week by an overwhelming vote of 406 to 3, and it is currently in the Senate where the author of the companion bill, Senator Marco Rubio (R-FL), is working to advance it. More on the bill here. In order for either bill to become law, the Senate will also have to pass it and the President sign it. FDRA will keep you updated on this important issue.

We encourage all footwear professionals to attend FDRA's digital supply chain (FTDC) event for the latest insights on these critical trade issues:

Action on Trade Policy in D.C. This Week

It has been a busy couple of weeks in D.C. when it comes to international trade policy. Here are a few quick updates:  FDRA Comments on Repeal of Care Labeling Rule: The Administration may repeal the federal rule that requires manufacturers and importers of textile wearing apparel to attach labels with instructions on how to care for the product. The proposal to repeal the rule follows years of debate from dry cleaners, brands, and other stakeholders on the need to change the rule and whether to allow or require labels with professional wet-cleaning instructions. In its comments, FDRA recommended amending the rule to allow companies to seamlessly move goods in international markets and encourage new innovations like digital labeling. Read FDRA's Comments.

Haiti Trade Preference Extension (H.R. 991): The Senate voted this week to extend duty-free treatment for goods made with U.S. textiles in Haiti and other Caribbean countries. This trade-preference program (Caribbean Basin Economic Recovery Act) was set expire at the end of the month, and the bill extends the program through September 30, 2030. Now that both the House and Senate have approved the extension, it heads to the President’s desk for a signature to become law.

XPCC Sanctions: Last week, the Treasury Department announced an extension of the deadline for U.S. companies to end transactions with subsidiaries of the Xinjiang Production and Construction Corps (XPCC) in compliance with recent sanctions. The new deadline is November 30th. FDRA joined a number of associations in a letter urging the Administration to extend the deadline in order to give companies time to complete the necessary due diligence. Companies conducting due diligence have significant challenges since XPCC may have tens of thousands of subsidiaries according to some press reports.

New House Republican Recommendations on China: The House Republican China Task Force released its report to Congress this week, outlining 400 recommendations that Congress and the Administration should take when it comes to U.S. policy on China. This includes both legislative and administrative action, and many of the bills the Task Force recommends have already been introduced. You can view the Report here.

Past FDRA Member Weekly Check-In Call Recordings

FDRA Members can view past FDRA Member Weekly Check-In calls here: FDRA Intel Center (You need to register and create a password to access).

Sponsored by