46% Tariff – A Push for Vietnam to Transform and Rise

According to 2024 figures, Vietnam exports a large amount of goods to the United States. With the new tax rate, many products will almost no longer be competitive in price.

Similarly, the wood industry – one of Vietnam’s export strengths – has also been deeply affected. Last year, wood and wood products exports reached more than 16.2 billion USD, of which the US market alone accounted for 56%, equivalent to more than 9.1 billion USD. Textiles and garments also face a similar risk as export turnover to the US accounts for 40% of the entire industry, or more than 10 billion USD.

The US government's 46% reciprocal tax policy will directly affect exports and the competitiveness of Vietnamese goods in the US market, causing difficulties for domestic enterprises, especially in labor-intensive industries such as wood and textiles, causing psychological instability and affecting investment and overall growth...

This not only warns of a decline in orders, loss of market share or disruption of the supply chain – but also sounds the alarm that: Vietnam needs to shift from a dependent production model to mastering the value chain, if it wants to firmly step into the international market.

However, challenges always contain opportunities. And in this trial by fire, Vietnam can absolutely break through if it acts decisively and in the right direction.

First of all, this is the time to diversify export markets. In 2022, trade turnover between Vietnam and CPTPP member countries reached more than 104.5 billion USD, up 14.3% over the previous year. The EVFTA, UKVFTA and RCEP agreements also open a huge door for Vietnamese businesses to enter markets with high standards but great potential.

At the same time, Vietnam needs to take advantage of this time to accelerate the restructuring of the growth model, shifting from “assembly and processing” to “innovation, high technology, green and sustainable”. Strict requirements from the US on traceability, origin control, labor and environmental standards will no longer be a barrier if we know how to see them as a driving force to upgrade the entire production chain.

In particular, in the context of difficult export markets, the domestic market - with more than 100 million people - must be considered a strategic pillar. This is the time to promote domestic purchasing power, promote consumption of high-quality Vietnamese goods, and invest heavily in fundamental industries serving the domestic market, thereby creating a closed economic cycle that is more sustainable in the face of external fluctuations.

In 2023, Vietnam's total retail sales of goods and consumer service revenue will reach more than VND6 trillion, an increase of over 9.6% compared to 2022. That figure reflects a huge potential waiting to be exploited more deeply and systematically - instead of letting the domestic market be wasted on rampant imports or undirected consumption.

The State needs to play a more proactive and “constructive” role in trade negotiations, build trade defense capacity, and support businesses in green transformation, supply chain transparency, and the development of supporting industries and core technologies.

Businesses also need to change their mindset – from “working for hire” to “being the boss”, from “selling cheap volume” to “selling creative and sustainable value”. This is not only the way to overcome the current difficulties, but also the only way for Vietnam to become a responsible manufacturing nation and a strong brand in the region.

If Vietnam can take advantage of this boost, it will not only stand firm against the waves of tariffs, but also transform itself into a self-sufficient, green and smart manufacturing country, capable of making a substantial contribution to the global value chain.

A nation with aspirations to rise up will not forever be a subcontractor for the dreams of others. It is time for Vietnam to design its own dreams – with the intelligence, the courage, and the inner strength of an emerging nation.

Source: https://hanoimoi.vn/thue-quan-46-cu-huych-de-viet-nam-chuyen-minh-va-vuon-len-697981.html