Solving the challenges from the risk of global trade war

Vietnam's exports may face the risk of being strongly impacted by US protectionist and tariff policies, requiring Vietnam to have timely and effective solutions to respond.

As trade competition intensifies, multinational corporations tend to shift production to Vietnam.

Risk from trade war

The global and regional situation is evolving very unpredictably, directly impacting our country, especially exports, production - business, and the macro economy. If a global trade war breaks out, it will disrupt supply chains and narrow export markets. These comments were made by Prime Minister Pham Minh Chinh at the regular Government meeting on February 5.

It can be said that the US trade protection policies and tax policies, along with the risk of increasing global trade tensions due to retaliatory tariffs between major economies, have been predicted by many experts to have a negative impact on Vietnam's export activities.

According to analysis in a report published in January 2025 by the Academy of Finance, the tariff policies of the Donald Trump administration are also a significant risk that will slow down global trade growth. If countries such as China, the EU, Japan, etc. are restricted from exporting to the United States, they may increase their consumption of domestically produced goods, instead of importing goods from other countries such as Vietnam.

According to Master Le Vu Thanh Tam (Institute of Economics and Finance, Academy of Finance), the United States may impose higher anti-dumping taxes on imported goods from Vietnam. In the context of the US's growing trade deficit with Vietnam, this is a fairly obvious risk.

In addition, there is the risk of increased exchange rates with the strengthening trend of the USD. The increased trade protectionism of the United States can cause the USD to increase in value. Because it is mainly used in global trade and financial transactions, fluctuations in the USD also affect the global economy, leading to financial tightening, leading to the risk of financial crisis and growth decline in emerging and developing countries. The increase in the USD price will cause emerging economies to face credit risks when debts denominated in USD become more difficult to repay.

The Government will continue to remove institutional and legal obstacles, improve the investment and business environment in a more transparent and favorable direction to attract investors, and will immediately implement a number of important policies approved by the National Assembly.

According to Associate Professor, Dr. Nguyen Thuong Lang (Institute of International Trade and Economics, National Economics University), if the USD increases sharply, it will create pressure such as increasing the number of mergers and acquisitions (M&A) deals from investment capital flows into Vietnam, especially in the service sector, increasing the risk of bankruptcy of small and medium enterprises, increasing unemployment, imported inflation, etc.

However, besides the challenges, past figures show that Vietnam is one of the countries that has benefited greatly from the US-China trade war and possibly the upcoming new US tariff policy. Since the US imposed high import tariffs on Chinese goods in 2018, Vietnam's export turnover to the US has increased sharply.

However, for exports to truly benefit in the context of a possible global trade war, Vietnam must have adequate infrastructure, production capacity, and the ability to comply with the trade requirements of the US market in the long term.

Solving the challenge

At the recent regular Government meeting, Prime Minister Pham Minh Chinh asked Government members to propose solutions to respond quickly and promptly, not to be passive or surprised, not to miss opportunities, and to maintain momentum, keep the rhythm, and maintain the existing spirit to continue developing.

Accordingly, the Prime Minister requested to promote harmonious and sustainable trade with major partner countries, expand export markets, focus on diversifying markets and export products. Effectively exploit 17 signed free trade agreements (FTAs), new and potential markets such as the Middle East, Halal, Latin America, Africa; promote negotiations and sign new cooperation frameworks.

In particular, the Prime Minister directed that it is necessary to ensure a close connection between input and output of production. According to Deputy Minister of Planning and Investment Tran Quoc Phuong, if stable output cannot be maintained, domestic production will face difficulties. Therefore, finding and expanding consumption markets is a key factor to promote production and stabilize growth in the coming time.

According to Associate Professor, Dr. Nguyen Thuong Lang, it is necessary to form new foundations for development, including increasing import-export turnover, Vietnam-US investment equivalent to import-export turnover, Vietnam-China investment to create balanced trade relations in the new period.

In addition, past experience shows that when trade competition is fierce, multinational corporations tend to shift production to Vietnam. According to forecasts by experts from the Academy of Finance, foreign-invested enterprises from Korea, Taiwan and Japan may move more production stages to Vietnam.

To further attract foreign investment, Deputy Minister Tran Quoc Phuong said the Government will continue to remove institutional and legal obstacles, improve the investment and business environment in a more transparent and favorable direction to attract investors. At the same time, it will immediately implement a number of important policies approved by the National Assembly, especially the "green channel" policy to attract large investment projects in the high-tech sector.

Source: https://baodautu.vn/hoa-giai-thach-thuc-tu-nguy-co-thuong-chien-the-gioi-d244625.html