What to do immediately when the US postpones tax imposition

Responding like in... the COVID-19 pandemic

Mr. Nguyen Chanh Phuong - Vice President of the Handicraft and Wood Processing Association of Ho Chi Minh City said that during this period, it is necessary to prepare for response situations similar to those during and after the COVID-19 period. During this 90-day suspension, there is enough time for export enterprises to negotiate with existing partners, arrange orders, available sources of raw materials, and resolve issues related to their supply chains.

“This is difficult but there is enough time to turn things around, especially in international trade relations, businesses must manage based on the origin of goods,” Mr. Phuong emphasized.

A feasible solution that can be implemented soon is that businesses need to import more raw materials from the US to create mutual support. “If we can come up with a CO - agreement between the two countries in the direction that tables and chairs made from American wood are exported to the US, there will certainly be incentives that will encourage better assurance of origin. According to Mr. Phuong, raw materials and accessories are not Vietnam's strengths, so it is also necessary to shift the localization of accessories. When increasing the rate of product localization, the management of origin will be more certain.

Associate Professor Dr. Pham The Anh (Hanoi National Economics University) assessed that the US government's temporary suspension of tariffs to continue negotiations is an opportunity, but also a warning. Because one of the conditions expected to be brought to the negotiating table will be related to the localization rate and origin of products. Therefore, Vietnamese enterprises as well as foreign direct investment (FDI) enterprises in Vietnam and the Government's macro policies need to aim to increase the localization rate to minimize risks from trade defense measures.

“Increasing the localization rate of products is the most correct direction for Vietnam to contribute more to the global value chain. FDI enterprises themselves must also be proactive in this. It is the responsibility not only of Vietnam but also of FDI enterprises,” Associate Professor Dr. Pham The Anh told reporters of the Vietnam Law Newspaper.

According to Associate Professor Dr. Pham The Anh, FDI enterprises cannot just come to Vietnam and bring all the raw materials to Vietnam for production and then export. This is no longer as easy as before in the current risky context. Because currently, exporting enterprises must prove the origin of their goods, which directly affects their interests, therefore, they need to closely cooperate with Vietnam to change together.

In addition, the global trade game has changed, so Vietnam needs to diversify its markets to avoid dependence on one large market. Therefore, in addition to negotiating with the US, Vietnam also needs to proactively work with other major trade partners, not only focusing on traditional markets such as the EU, Japan, Korea... but also boldly exploiting potential markets such as the Middle East, South America or Africa.

In addition, it is necessary to avoid over-reliance on a few key export industries. Because even if accepting a decrease in export scale, if the added value in exports increases, growth can still be achieved. Then, the benefits brought to the economy are still guaranteed, while minimizing risks from tariff measures of major economies.

Increase "listening" to market information

Regarding this issue, information from the Ministry of Industry and Trade said that the Ministry has just sent a document to export industry associations, manufacturing and exporting enterprises to note that export industry associations, closely coordinate with state management agencies to promptly provide information on mechanisms, policies, and international trade market movements to advise and guide member enterprises to proactively plan production and export.

In addition, the association is the focal point to support member enterprises in expanding and diversifying the supply of input materials for export production, limiting dependence on a single imported raw material market. It is recommended that member enterprises pay attention to ensuring the origin of input materials for production, meeting the requirements of importing countries on food hygiene and safety, traceability, and avoiding fraud of goods origin.

In addition to proactively developing plans to adapt to the new international trade situation through searching for customers and partners from import markets with much room and potential for exploitation and development, exporting enterprises need to consider the supply of raw materials to produce export goods, ensure the requirements of importers, traceability of products and origin of exported goods.

Nhat Thu

Source: https://baophapluat.vn/viec-can-lam-ngay-khi-my-hoan-ap-thue-tang-ty-le-noi-dia-hoa-san-pham-post545185.html