Urgent steps in response to new tax policies from the United States

The regular Government press conference for March 2025 took place on the afternoon of April 6 in Hanoi - Photo: VGP/Quang Thuong

Specifically, according to Deputy Minister of Industry and Trade Truong Thanh Hoai, the 46% tax rate that the United States plans to apply to goods exported from Vietnam to the US market from April 9 could have a significant and multi-dimensional impact on Vietnam's export activities and economic growth in the coming time; create negative impacts on Vietnam's export activities and economic growth, affect the development of a number of processing and manufacturing industries, attract FDI, domestic investment, as well as services and employment of domestic workers.

Some key export items such as: Computers, electronic products and components; machinery, equipment, tools, other spare parts; textiles, footwear, etc.; the part of products exported to the US in the processing and manufacturing sector faces the risk of decreasing export turnover. Because when taxes increase, the price of Vietnamese goods in the US will increase, the level of competition with goods from other countries will be less. In addition, the purchasing power of US consumers is likely to decrease, so Vietnamese goods exported to this market will decrease.

This also involves signed contracts, as US businesses may consider whether to continue contracts with such a policy. At the same time, new contracts will be relatively difficult.

Currently, the Government has been taking active measures to engage with the US and find solutions that harmonize the interests of both sides. In recent times, the Ministry of Industry and Trade has proactively implemented a series of measures, increasing work at all levels with the US to clarify Vietnam's stance.

After the US President announced the reciprocal tax rate, on the morning of April 3, 2025, Minister of Industry and Trade Nguyen Hong Dien sent a diplomatic note to the US Trade Representative requesting to postpone the decision to impose the above tax to discuss and find a solution that harmonizes the interests of both sides; at the same time, he requested to arrange a phone call as soon as possible to discuss and handle this issue.

Later, in a phone call on the evening of April 4, General Secretary To Lam and President Donald Trump affirmed their desire to continue to strengthen bilateral cooperation for the benefit of both countries; Vietnam is ready to negotiate with the United States to reduce import tariffs to 0% for goods imported from the United States, and at the same time propose that the United States apply similar tariffs to goods imported from Vietnam. This is an important step in the process of resolving the US tariff issue.

“In the coming time, through the policy dialogue mechanism of the Vietnam - US Trade and Investment Council (TIFA), the Ministry of Industry and Trade will coordinate with relevant ministries and branches to maintain close exchanges with US partners, coordinate with the US to handle existing issues in bilateral economic and trade relations, as well as study appropriate economic and trade cooperation frameworks in the new situation to serve the interests of the business communities of the two countries,” said Deputy Minister Truong Thanh Hoai.

In addition, the Prime Minister has established a Working Group to enhance cooperation and proactively adapt to the adjustments of the US economic and trade policies, with Deputy Prime Minister Bui Thanh Son as Head of the Working Group, the Minister of Industry and Trade as Deputy Head of the Working Group, and members being leaders of relevant ministries and branches. The Ministry of Industry and Trade is the standing agency of the Working Group.

In the coming time, the Working Group will be responsible for assisting the Prime Minister in closely monitoring developments in the world and the region, especially adjusting the US economic and trade policies, to proactively advise, propose and recommend to the Government and the Prime Minister measures to adapt flexibly, promptly, appropriately and effectively, overcome challenges, seize opportunities, continue to maintain a peaceful and stable environment, a favorable foreign situation, and maximize external resources for economic growth and development.

Deputy Minister Truong Thanh Hoai - Photo: VGP/Nhat Bac

“In the coming time, our exports will face many challenges. Therefore, ministries and sectors will closely coordinate with the Vietnamese business community and foreign enterprises investing and doing business in Vietnam to effectively implement the proposed solutions, aiming to achieve export growth in 2025,” Deputy Minister Truong Thanh Hoai informed.

Regarding solutions, Mr. Truong Thanh Hoai said: Firstly, take advantage of the existing strengths of 17 free trade agreements with over 60 countries and territories; 70 bilateral economic and trade cooperation mechanisms.

Second, promote the strategy of diversifying export markets, continue to promote negotiations of FTAs ​​with new markets in the Middle East, Latin America, Central Asia and other emerging markets.

Third, improve the effectiveness of trade promotion and logistics infrastructure to reduce transportation costs and enhance the competitiveness of Vietnamese goods.

Fourth, support the improvement of the capacity of domestic manufacturing and exporting enterprises of Vietnam to ensure adaptation to the market and development trends. Have more drastic policies for the processing and manufacturing industry, promote the development of supporting industries to promote domestic development, and meet the origin requirements of countries.

Fifth, protect the legitimate rights and interests of businesses as well as provide early warning and timely handling of risks of lawsuits or trade defense cases to minimize the damage to Vietnam.

Sixth, expand the Vietnamese trade office system abroad to provide market information, business opportunities and better support for businesses.

Seventh, despite facing many challenges, this is also an opportunity to restructure the economy towards rapid but sustainable development, greening, digitalization, relying on science and technology, innovation; promoting the construction of an independent, self-reliant economy associated with deep, substantive, and effective international integration; promoting market expansion, diversification of markets, products, and supply chains; promoting localization; promoting exploitation of domestic markets and resources.

For Vietnamese enterprises, to minimize risks from international trade fluctuations, the Ministry of Industry and Trade recommends that domestic enterprises take the following measures:

Firstly, regularly monitor and proactively update information on markets and trade policies of countries, to promptly adjust appropriate business strategies.

Second, on the basis of existing FTAs, diversify export markets, through effectively exploiting key markets, traditional markets, as well as developing small markets, niche markets and opening up new potential markets.

Third, improve product quality: Ensure products meet technical, labor and environmental standards of export markets, to increase competitiveness and reduce the risk of being subject to trade defense measures.

Fourth, control of raw material origin: Focus on controlling the origin of raw material supply for production, ensuring compliance with FTA rules of origin and avoiding risks related to trade fraud.

Fifth, strengthen trade defense capacity, raise awareness and ability to respond to foreign trade defense measures, through regular information updates and participation in relevant training courses.

The synchronous implementation of the above solutions will help Vietnamese enterprises increase their resilience to fluctuations in international trade and maintain sustainable export growth.

“The Ministry of Industry and Trade will continue to accompany Vietnamese enterprises in their efforts to export to the US market, while actively researching and expanding potential export markets,” Deputy Minister Truong Thanh Hoai affirmed.

Source: https://thoibaonganhang.vn/cac-buoc-di-khan-truong-trong-ung-pho-voi-chinh-sach-thue-moi-tu-hoa-ky-162370.html