Vietnamese exporters cope with high US tariffs

Ms. Nguyen Thi Phuong Thao - CEO of Garment Corporation 10 - JSC: Proposing the Government to support textile and garment enterprises more in tax and customs policies

Ms. Nguyen Thi Phuong Thao - CEO of May 10 Corporation - JSC

For Garment 10 Corporation - JSC, 60% of goods are exported to the US market. But before the US import tax policy, we proactively diversified the market to reduce dependence on the US, and at the same time diversified the supply source to reduce dependence on China.

Along with that, we implement saving solutions on all activities from energy, electricity, water, increase investment in technology equipment to increase labor productivity, increase efficiency to have the most competitive price.

On the other hand, we strengthen the development of the domestic market to balance the export and domestic balance; closely monitor the origin of raw materials and the policies of the Vietnamese and US Governments to have appropriate production and business strategies.

In order to support domestic export enterprises, the Government has recently made great efforts to negotiate and sign free trade agreements, supporting export enterprises with the opportunity to sign orders to many different regions. Currently, we maintain exports to the EU, Japan, Australia and some major markets... We will strive to make good use of these opportunities.

On the other hand, we hope that the Government will take action to reduce taxes and fees to support businesses. With the high tax rate as announced by the US, it is expected that inflation will increase, prices will increase, purchasing power will decrease, and consumer demand will decrease, which will affect the order rate.

Mr. Pham Dinh Ngai - CEO of Tra Vinh Farm Company Limited: Continue to maintain and promote the development of the domestic market

Mr. Pham Dinh Ngai - CEO of Tra Vinh Farm Company Limited.

We have an order to export organic coconut flower sugar, concentrated coconut flower sugar, and soy sauce under the Sokfarm brand to the US. The issue we are most concerned about is whether the customer will continue to implement this order because the tax will be higher than when they placed the order.

Regarding the announcement by US President Donald Trump to impose a basic import tax of 10% and a corresponding tax of up to 46% on Vietnamese goods imported into the US, in my opinion, we will have many more steps of negotiation, so I expect that Vietnam's flexible foreign policy will gradually resolve this issue. Currently, we still have to listen and wait for the results of the negotiations, the decisions and advice of the Government, as well as the ministries and functional agencies.

On the business side, the domestic market is still the main market. In fact, the domestic market has a lot of potential. When the trade war happened, it was also a reminder of the potential of the domestic market. Domestic goods will be one of the advantages of Vietnamese people in the future. Currently, the internal strength of Vietnamese enterprises is getting better and better and the domestic market is also full of potential, so we will continue to maintain and promote development.

Regarding export markets, the US is a large market but not all, businesses can seek opportunities in many other markets as well as niche markets. In the coming time, we strive for the export market to account for 30-35% of revenue.

Ms. Phan Thi Thanh Xuan, Vice President and General Secretary, Vietnam Leather, Footwear and Handbag Association: There should be better incentive policies to help businesses save production costs.

Ms. Phan Thi Thanh Xuan - Vice President and General Secretary, Vietnam Leather, Footwear and Handbag Association.

With the news that the US is imposing a tax of up to 46% on imported goods from Vietnam, our footwear industry is facing an extremely big challenge in the coming period.

As we know, the footwear industry accounts for 40% of total export turnover to the US market, with a value of more than 10 billion USD, so high taxes will certainly cause exports to stagnate.

However, we should not be too alarmed, because in reality, looking at the overall supply chain, footwear is an item that is no longer produced in the US. Moreover, Vietnam is also a fairly reliable source of supply and is deeply embedded in the US market supply chain. However, with rising costs, businesses will certainly have to find solutions to continue to maintain production, as well as further optimize the production process, helping to balance the increased tax costs in the near future.

To cope, we do not only have the US market in front of us. Vietnam has up to 16 free trade agreements with other countries, including two very large agreements, EVFTA and CPTPP, as well as the UK market. Therefore, continuing to diversify export markets as well as taking advantage of the advantages of markets with free trade agreements is still a priority for businesses.

Besides, the above challenge is probably also an opportunity for businesses to restructure the production process, increase labor efficiency, and reduce input costs.

Through this, we also recommend that ministries and branches need to have better policies, especially preferential policies, reform administrative procedures, taxes, customs, help businesses get tax refunds faster, customs procedures are more open, creating favorable conditions for businesses to save costs in the production process.

With the upcoming negotiations, we can think of solutions such as importing raw materials available in the US market. For example, leather products are strong, or high technology from the US for the leather and footwear industry. This is a solution to help us rebalance the trade balance.

Source: https://hanoimoi.vn/doanh-nghiep-xuat-khau-viet-nam-ung-pho-voi-muc-thue-cao-cua-my-697802.html