Import Taxes Heat Up Again, Vietnam Is Ready to Respond

Amidst the US’s continuous adjustments to import taxes policies, economic expert Assoc. Prof. Dr. Nguyen Huu Huan asserts that Vietnam faces both a golden opportunity for breakthrough growth and considerable risks. This article delves into these impacts and proposes response scenarios to help Vietnam proactively “ride the waves” and seize the moment.

“Wind change” in us tariff policy, Vietnam faces both opportunities and challenges

Unpredictable fluctuations in US trade policy, particularly the increase in import tariffs on goods from various nations, are creating a new “playing field” for the global economy. Vietnam, with its growing position on the world trade map, is not outside this vortex.

According to Assoc. Prof. Dr. Nguyen Huu Huan from the University of Economics Ho Chi Minh City, the US’s new tariff policies not only impact major economies like China, Canada, and Mexico, but also present intertwined opportunities and challenges for Vietnam.

“Golden Opportunity” to Welcome Investment and Export Wave?

 “If the US tariff policy remains unchanged, Vietnam and Southeast Asian countries will definitely benefit from exports and FDI attraction,” – Assoc. Prof. Dr. Nguyen Huu Huan affirmed.

The expert’s analysis reveals that as goods from highly taxed countries become less competitive in the US market, Vietnam can emerge as an attractive destination due to:

• Export Boost Momentum: Vietnamese businesses can leverage their competitive advantages in price and quality to enhance goods exports to the US, especially items previously dominated by China.
• FDI Magnet: International investors are increasingly seeking safer and more stable production locations outside of China to mitigate risks from trade wars. Vietnam, with its stable political environment and competitive costs, becomes an ideal destination.

Risks Cannot Be Overlooked

However, Assoc. Prof. Dr. Nguyen Huu Huan also cautioned about potential risks that Vietnam needs to be highly aware of:

“Monitoring List” and the Danger of Being “Targeted”: Vietnam was previously placed on the US’s monitoring list for currency manipulation and remains on this list. Vietnam’s growing trade surplus with the US may make it the next target of the US’s tough trade policies.

Risk of Becoming a “Transshipment Hub” and “Catching Stray Bullets”: Without strict control, Vietnam could be exploited as a transshipment point for illegal goods or goods evading tariffs from countries heavily taxed by the US. This could lead to the US imposing trade sanctions on Vietnamese goods.

“Guiding Principles” for Response: Proactive, Flexible, and “Self-Reliant”

To mitigate risks and maximize opportunities, Assoc. Prof. Dr. Nguyen Huu Huan offers strategic recommendations for Vietnam:

Proactively Reduce Trade Surplus with the US:

• Increase Imports taxes of US Goods: Encourage Vietnamese businesses and consumers to prioritize using US goods through preferential tax policies, facilitating market access.

Enhance Internal Capacity, “Self-Reliance” in Supply Chains:

• Promote Localization: Increase the utilization rate of domestically produced raw materials and components for exports, reducing import dependence, especially from countries at risk of US tariffs.
• Develop Private Enterprises: Create a favorable environment for domestic private enterprises to grow stronger, becoming the driving force for growth and the backbone of the economy.

Diversify Markets, Avoid Reliance on a Single Market:

• Expand Export Markets: Focus on tapping other potential markets such as Southeast Asia, the Middle East, and Africa, reducing dependence on the US market.
• Utilize FTAs: Maximize the benefits from signed Free Trade Agreements (FTAs) to expand markets and diversify trade partners.

Develop Detailed Response Scenarios, Be Prepared for All Situations:

• “Cut Your Coat According to Your Cloth”: The government and businesses need to proactively develop specific response scenarios for every possible worst-case situation, ensuring flexibility and rapid adaptability.

“Time of Opportunity” Has Come, Seize the Moment, Overcome Challenges

In the context of a volatile global economy, Vietnam is facing a historic opportunity for strong growth. However, to turn opportunities into reality and minimize risks, proactivity, flexibility, and a spirit of “self-reliance” are crucial. Developing response scenarios, promoting localization, diversifying markets, and maintaining good relations with trade partners will be key factors for Vietnam to “ride the waves” and achieve sustainable development in the coming time.