Facing US tariff threat, Vietnam’s furniture makers fight back against claims of illegal trading practices

Vietnam has reaped the benefit of the US-China trade war, seeing its goods surplus with the US surge by 180 per cent since Donald Trump won the 2016 election

Two separate US probes into timber trade and currency have sent ripples of anxiety through the furniture industry, one of the big winners

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INNI Homes, a supplier to US companies such as La Z Boy Casegoods, relocated its production from China to Vietnam before the trade war, in 2012. Photo: Shutterstock

Published: 6:30pm, 29 Dec 2020Updated: 6:41pm, 29 Dec 2020

Vietnamese businesses are pushing back against investigations by the United States into its timber industry and currency management that threaten to wipe out Vietnam’s huge gains from the US-China trade war.

The Southeast Asian nation has been heralded as one of the main victors of the superpower clash, soaking up manufacturing exiting China to avoid Donald Trump’s trade tariffs on Chinese goods.

As a result, Vietnam’s own trade surplus with the US ballooned – up 180 per cent in October compared to the same month four years earlier, just before Trump’s election victory, according to US government data.

Now, it finds itself in the firing line, the subject to two separate Section 301 investigations, the same mechanism the Trump administration used to launch trade war tariffs on US$360 billion of Chinese goods.

Earlier this month, it was labelled a currency manipulator, with the US Treasury claiming it had intervened in currency markets to deflate the price of its exports. This could lead to blanket tariffs on all Vietnamese exports.

A second probe into alleged timber trading malpractice could see tariffs slapped on its burgeoning furniture industry, a substantial portion of which arrived from China to avoid rising costs, including trade war tariffs.

This probe has sent a ripple through the industry, which capitalised on coronavirus lockdowns to increase its US exports by 80 per cent in the year to the end of October, according to supply chain analysis firm Panjiva.