Identifying the challenges of trade in goods with the US

Trade in goods with the US is growing strongly, but Vietnam is facing a series of major challenges related to its trade surplus and the increasing risk of being sued for tax evasion.

Identify the challenge

After the 2024 US presidential election, Vietnam-US bilateral trade relations face challenges and opportunities in the coming years. In particular, Vietnam is facing three challenges: the trade surplus is increasing sharply in both proportion and speed; the US still identifies Vietnam as a non-market economy; with a large economic openness, participating in many bilateral and multilateral trade agreements, Vietnam is the gateway for third-country goods to avoid US import taxes.

If these challenges are not promptly identified and adjusted to minimize their impact, they will create more difficult problems for exported goods, potentially affecting production. Accordingly, finding solutions to significantly reduce the trade deficit, including the goal of achieving reciprocity in the corresponding tariff schedule, as well as solving the problems of transshipment and origin fraud are real, complex and likely to occur challenges.

At the online discussion: Assessment of US trade policy impact on Vietnam's goods trade organized recently by the Department of European - American Markets (Ministry of Industry and Trade), Dr. Le Huy Khoi, Deputy Director of the Institute for Strategy and Policy Research of Industry and Trade, said that many businesses and the international community have different forecasts about the new trade policy under President Trump, but above all, these will be priority policies aimed at ensuring core interests for the US, which are protecting domestic production, avoiding over-dependence on foreign countries, and attracting investment for domestic production.

In the first 11 months of 2024, two-way trade between Vietnam and the US reached nearly 123 billion USD, an increase of nearly 13 billion USD compared to the performance of the whole of last year. The US continued to be Vietnam's largest export market with a turnover of 108.9 billion USD, up 23.9%; imports from the US reached 13.5 billion USD, up 7.3%; Vietnam had a trade surplus of 95.4 billion USD, up 26.7% over the same period last year.

Vietnam's main export products to the US are diverse, from agricultural products (coffee, cashew nuts, pepper, rice), seafood (shrimp, basa fish) and garments, footwear, electronic components, wood and wood products..., playing an important role in the global supply chain.

According to Dr. Khoi, in the near future, processing and manufacturing industries such as textiles, footwear, electronics, machinery and equipment with large export turnover to the US need to pay attention to trade defense measures. Agricultural products, which are essential consumer goods of Vietnam to the US, will not be affected much in the short term.

Ms. Virginia Foote, President and CEO of Bay Global Strategies Company, recommends: “Under President Donald Trump 2.0, the US can continue to apply protectionist measures such as import controls, tariffs and strict labor and environmental standards to protect domestic production and reduce the dependence of the entire supply chain on China.”

Diversify markets, increase imports from the US

Vietnam's import and export in 2025 is forecast to continue to grow, as demand in many major markets increases, including the US, inflation in many markets (EU, Japan) decreases... These factors have a positive impact on Vietnam's trade with the world.

However, the risk of trade restriction policies and tariff barriers is always looming, especially as the export scale in 2025 is forecast to increase, far exceeding the 400 billion USD mark (the General Department of Customs calculates that import and export for the whole year of 2024 will reach 782.33 billion USD).

To minimize risks, Dr. Le Huy Khoi emphasized that Vietnam needs to promote economic reform, diversify export markets and improve competitiveness. Enterprises should proactively improve technology, comply with international standards and develop long-term strategies to meet the requirements of the US market. Major export industries to the US must proactively regulate to limit being "scrutinized".

According to Mr. Diep Thanh Kiet, Vice President of the Vietnam Leather, Footwear and Handbag Association (Lefaso), exports to the US have accounted for over 40% of Vietnam's total footwear and handbag exports for many consecutive years. Through analysis, the problem at the national scale is to reduce the trade deficit between the two sides to ensure trade fairness, in line with the goals of the new US administration, because Vietnam currently has a large trade deficit with this market.

Presenting solutions, Mr. Kiet suggested that the Government could reduce exports or increase imports to reduce the trade deficit. However, reducing exports is not feasible because it would affect economic growth, but it should control exports in a practical way to avoid fraud in the origin of goods. "Regarding imports, in my opinion, we should find sources of imports from the US, which is a fair trade solution for this market," Mr. Kiet suggested.

Source: https://baodautu.vn/nhan-dien-thach-thuc-thuong-mai-hang-hoa-voi-my-d233799.html