Need to quickly and strongly reduce taxes on imported goods from the US

Regarding this content, Hanoi Moi Newspaper reporter discussed with economic expert, Dr. Le Quoc Phuong, former Deputy Director of the Center for Industry and Trade Information (Ministry of Industry and Trade).

Economist, Dr. Le Quoc Phuong. Photo: N.Lan

-What do you think about the US decision to impose a 46% tax on 90% of imported goods from Vietnam?

-I am not surprised by the US President's announcement of a tax policy on all imported goods into this country, without excluding any country.

Vietnam ranks third in the world in terms of trade surplus with the US market after China and Mexico, so it cannot avoid being taxed. However, I am surprised that the tax rate that the US imposes on Vietnamese goods is up to 46%, among the countries with the largest tax margins.

Recently, the Government and the Ministry of Industry and Trade have proactively taken many positive, goodwill and fairly quick actions with the US partner. Specifically, since mid-March, the Prime Minister has sent the Minister of Industry and Trade to the US as a special envoy and signed agreements to import goods from the US, while also committing to increase purchases of US goods in the long term, especially high-tech goods.

At the same time, the Government issued Decree 73/2025/ND-CP amending and supplementing preferential import tax rates for a number of goods, including goods from the US. And recently, on April 1, the Ministry of Industry and Trade urgently drafted a Decree on strategic trade control and quickly announced it for public comment in order to soon issue it.

-In your opinion, how will this decision affect Vietnam's export turnover to the US?

-The US is our country's largest export market, so this decision greatly affects Vietnam's export industries.

However, FDI enterprises are affected first because the export proportion of enterprises in this group is very large, mainly focusing on electronics, high technology, mobile phones, etc.

For domestic enterprises, the most affected sectors are agriculture, forestry and fishery, wood and wood products, textiles, and footwear.

In 2024, the wood industry alone will export about 15 billion USD to the world, of which the US market will be more than 9 billion USD, a very large number.

And when export businesses are affected, the entire economy will be affected, because Vietnam's economic growth relies mainly on exports.

The 46% tax on imported goods from Vietnam will affect many industries, including textiles. Photo: NQ

- According to you, what can Vietnamese export enterprises do to adapt to this tax rate?

-In my opinion, businesses must implement a series of solutions both short-term and long-term.

In the short term, businesses need to negotiate with importers in the US to share the burden. At the same time, businesses need to cut and save costs to maintain profits and the US market because this is still a large and potential market.

I note that businesses should also accept low profits in the short term to continue to have many solutions to promote tax reduction in the future.

In the long term, businesses need to continue to cut costs even more and diversify their markets. We are currently too dependent on the US market with nearly 1/3 of total export turnover, so the risk is quite high. In fact, businesses have made efforts to diversify their markets, but they need to do more, although this is costly but necessary.

-In your opinion, what strategy should the Vietnamese Government have to protect domestic enterprises from the impact of this tax policy?

-As mentioned above, the Government has recently responded quite quickly, but in my opinion, it is not strong enough and not fast enough to match the policy of the US Government. Therefore, we should consider reducing import taxes on goods from the US more quickly and strongly to continue to demonstrate Vietnam's clear goodwill.

Vietnam is a complementary economy to the US, many of Vietnam's export products do not compete with US goods, so protecting domestic production through such tax reductions is not a concern.

Looking at the world, even before the US President announced his tax policy, Israel was the country that quickly announced to lower all import taxes on goods from the US to 0%.

Vietnam does not necessarily have to do the same, but it needs to lower taxes on many groups of goods from the US without affecting domestic production too much at the current stage.

Second, it is necessary to take advantage of Vietnam's existing comprehensive strategic partnership with the US to urge the US to consider its goodwill and possibly reduce tariffs to a reasonable level in the near future, even if it takes at least half a year.

In this context, I think the Government needs to have solutions to support businesses in the face of this shock without violating WTO regulations. At the same time, the Government continues to promote administrative reform, transparency in the investment and business environment, and faster response to adverse situations.

The above measures need to be implemented more drastically and promptly to minimize negative impacts on the economy.

-Thank you very much!

Source: https://hanoimoi.vn/can-giam-nhanh-manh-thue-voi-hang-hoa-nhap-khau-tu-my-697751.html