Industry associations: Building scenarios to respond to reciprocal tariffs from the United States

Change from within

According to the assessment of the Department of Industry and Trade, the United States has been the largest export market of Binh Duong province in recent years. At the same time, the import-export trade balance between Binh Duong province and the United States also has a significant difference (Binh Duong province has a trade surplus). Therefore, in the context of Binh Duong province striving to achieve the double-digit growth target in 2025, the imposition of new US tax rates will have a profound impact on the production, business, and import-export situation of enterprises in the province in 2025 and the following years.

Mr. Nguyen Quang Vu, Chairman of the Binh Duong Province Leather and Footwear Association, speaking at a conference with provincial leaders, recommended that in the long term, the leather and footwear industry needs support to develop supporting industries.

In 2024, import and export activities of Binh Duong province will continue to maintain positive growth momentum, making an important contribution to the socio-economic development of the province. Enterprises are striving to maintain traditional export markets, expand new markets, and take full advantage of new-generation free trade agreements (FTAs) to ensure the completion of the 2025 plan, creating a stable development momentum in the following years. Mr. Nguyen Quang Vu, Chairman of the Binh Duong Leather and Footwear Association, said that enterprises should not only focus on the US market, but also need to expand to other potential markets and attract more retail customers. The Association proposed establishing new product research and development centers in Vietnam to help customers access, experience and choose suitable models.

“In the long term, the footwear industry needs support to develop supporting industries, especially raw materials such as rubber for shoe soles and components. The Binh Duong Leather and Footwear Association also recommends building specialized markets so that businesses can regularly introduce and sell products, instead of depending on large, periodically held fairs. Trade connection sessions between provinces, cities or regional links also need to be organized more frequently. In the context of the world and domestic economies facing many difficulties and challenges, the association hopes that relevant agencies such as fire prevention and fighting and the environment have reasonable inspection policies to avoid putting more pressure on businesses,” said Mr. Nguyen Quang Vu.

According to the Binh Duong Wood Processing Association, the current US import tax rate for most types of wooden furniture (HS code 9403) from countries with normal trade relations (NTR), including Vietnam, seems to be free, so the introduction of a reciprocal tax rate of up to 46% is a big shock. However, in terms of general information of the world market, businesses believe that Vietnam will reach an agreement in negotiating reciprocal tax with the US to this market.

Balance profits, share risks

Mr. Tran Thanh Trong, Chairman of the Binh Duong Province Electromechanical Association, assessed that the Government responded very quickly after the US announced the new reciprocal tax rate; at the same time, he hoped that Binh Duong province would promote activities to support businesses. He proposed to strengthen the development of the domestic market and improve the quality of labor in the electricity industry, which is lacking highly skilled human resources.

Mr. Ha Van Ut, Director of the Department of Industry and Trade, shared that the 90 days the US temporarily suspends reciprocal tariffs will help businesses resolve many outstanding issues. He emphasized that these are “90 golden days” for businesses to take advantage of exporting orders, restructuring value chains, improving structural weaknesses and shifting to sustainable growth, diversifying markets; and strengthening supply chains. Exporting businesses need to study increasing imports of goods and raw materials from the US market to reduce trade gaps and take advantage of the tax exemption mechanism for goods that meet the requirements of raw materials and other factors from the US; proactively contact US partners to negotiate profit balance and risk sharing.

Regarding capital support, the State Bank of Vietnam Regional Branch XVI said it will continue to implement solutions and policies to support businesses in removing capital difficulties; and implement solutions to respond to the US currency manipulation allegations.

Mr. Bui Minh Tri, Vice Chairman of the Provincial People's Committee, emphasized that the current big problem is the trade balance. While Vietnam mainly imports high-tech products from the United States, it exports to this market labor-intensive goods. The Vietnamese Government is making every effort to negotiate with the United States on this issue. Enterprises need to be calm and trust in the leadership and management of the Vietnamese Government; at the same time, accelerate market diversification by strengthening trade and economic relations with other countries to reduce dependence on the US market; strengthen domestic supply chains and US partners...

In 2024, enterprises in Binh Duong province will export to the US market 15.6 billion USD, an increase of 12.3% compared to 2023; imports from the US will reach 970 million USD, an increase of 15.3% compared to 2023; Binh Duong will have a trade surplus of 14.63 billion USD.

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Source: https://baobinhduong.vn/cac-hiep-hoi-nganh-hang-xay-dung-kich-ban-ung-pho-thue-doi-ung-tu-hoa-ky-a345160.html