American customers rush to buy 'black gold' after tax delay, Vietnamese businesses rush to work overtime

That is what Mr. Phan Minh Thong - Chairman of the Board of Directors of Phuc Sinh Group shared when talking about the changes of businesses and partners after President Donald Trump decided to postpone imposing high taxes on imported goods from 75 countries, including Vietnam.

Pepper export is Vietnam's strength, accounting for 40% of output and 60% of global export market share. In 2024, our country will export about 230,000 tons of pepper, earning 1.31 billion USD.

Notably, this item, considered as “black gold”, of Vietnam, exported to the US market accounts for a large proportion. Specifically, in 2024, exports to this country reached 72,300 tons of pepper, with a revenue of about 409 million USD, accounting for 31% of Vietnam's total pepper export turnover.

In the first three months of this year, Vietnamese enterprises exported nearly 47,300 tons of pepper of all kinds, worth 324.6 million USD. Compared to the same period last year, the amount of pepper exported decreased by 16.7%, but the value increased by 37.8% due to high pepper prices.

Pepper is a billion-dollar export item of Vietnam's agricultural sector. Photo: Minh Khang Pepper

Accordingly, in just 3 months, the US spent about 83.4 million USD to import 11,019 tons of "black gold", accounting for 25.7% of export turnover, and is also the largest customer of Vietnamese pepper.

The leader of the Vietnam Pepper and Spice Association said that because the US is the largest export market, the information about the 46% US tax rate surprised businesses in this industry. By April 7, many contracts signed with US partners had to be stopped or canceled, because US customers feared that the tax increase would be very risky.

However, trading activities between Vietnamese and American businesses changed dramatically when President Donald Trump suddenly announced a temporary suspension of high import tariffs for 90 days.

Mr. Phan Minh Thong shared, "As the number 1 pepper exporter to the US, if on April 9, many US customers met us and said we could no longer do business, then early in the morning of April 10, they sent us a lot of messages and sent a lot of orders." Customers closed their purchases very quickly, causing Phuc Sinh to 'crazy' and work 3 shifts.

Before the US's move to postpone high tariffs for 90 days, the price of "black gold" fluctuated strongly. In Vietnam, the price of pepper today (April 11) increased by 4,000-5,000 VND/kg, to 153,000-155,000 VND/kg.

Meanwhile, the export price of Vietnamese black pepper ranges from 6,600-6,800 USD/ton, while the price of white pepper is at 9,600 USD/ton.

The US cannot produce pepper, so every year this market has to import a large amount, mainly from Vietnam. "Now we only focus on trading," said Mr. Phan Minh Thong.

With the 90-day tax deferral, in addition to urgently speeding up the completion of previously signed orders to ship to the US, Dr. Nguyen Thuong Lang - senior lecturer at the Institute of International Trade and Economics (National Economics University) recommends that businesses need to urgently prepare a large enough risk contingency strategy that can withstand the long term.

He suggested that the domestic market of 100 million people is very large. Vietnamese enterprises need to build a solid domestic supply chain, creating the highest resilience to unexpected "shocks".

Meanwhile, the Chairman of the Board of Directors of Phuc Sinh Group said that if we want businesses to return, or support businesses to both develop their "home field" and expand their "away field", we need policies to support domestic manufacturing businesses like export businesses.

“When export enterprises sometimes borrow USD at an interest rate of just over 1%, while domestic production enterprises borrow VND at up to 9-10%, it cannot be considered a fair promotion mechanism. If the domestic production market has attractive interest rate loan packages, I believe that it can create a richer market for products,” Mr. Thong frankly said.

Along with that, if Vietnam has a commodity exchange, it will help businesses be more proactive, and can even participate in regulating the global flow of goods.

Mr. Thong emphasized that there is no “magic potion” that is effective immediately with support policies, but the exchange can be a “magic bag” that helps businesses significantly reduce the impact of tariffs on the US market. Trading through the exchange, then the flow of goods will go from here to the whole world, not depending on one largest market.

Vietnamnet.vn

Source: https://vietnamnet.vn/khach-my-toi-tap-mua-vang-den-sau-hoan-ap-thue-dn-viet-gap-gap-tang-ca-2390085.html