Vietnam in the context of US tariff policy adjustment: Golden opportunity to balance trade

Towards fair and sustainable trade

At a regular press conference held on the afternoon of April 10, the spokesperson of the Ministry of Foreign Affairs said: Vietnam believes that the US's postponement of reciprocal tariffs is a positive step and the two sides will negotiate an agreement on the basis of mutual respect to reach a satisfactory solution towards fair and sustainable trade and meet the interests of the people and businesses of both sides. This demonstrates the spirit of the Comprehensive Strategic Partnership as well as the spirit of "30 years of the two countries establishing diplomatic relations".

Deputy Prime Minister Ho Duc Phoc and his delegation met with US Trade Representative Jamieson Greer in Washington on April 10. Photo: VGP

According to Prof. Dr. Vo Xuan Vinh - Director of the Institute of Business Research (Ho Chi Minh City University of Economics ), the US's 90-day delay in applying the tax is an advantage for Vietnam to negotiate and review in order to come up with policies to reduce import taxes from the US. This is considered a golden 90 days for Vietnam to balance its trade balance.

So what should we do? According to Professor Vinh, in the short term, competent authorities should start by selecting the fields, goods, and industries that Vietnam needs to prioritize for economic development, for improving the quality of life of the people, such as liquefied gas, input goods for high-tech manufacturing to demonstrate that Vietnam is willing to trade with the US to increase imports from the US, to narrow the trade surplus gap between the US and Vietnam.

Next is to reduce taxes, increase the call for and encourage FDI investors from the US, especially large companies, multinational companies in the high-tech sector, banking and financial institutions, and large logistics enterprises with a presence in Vietnam.

In the long term, encourage domestic enterprises, domestic private enterprises, Vietnamese enterprises, and purely domestic enterprises to export to the US.

Textiles are one of the export items to the US with a high proportion.

On the business side, besides the US market, they must seek many other markets, such as the European market, the Asian market, the Latin American market to diversify trade relations.

To do that, the role of State agencies is very important in market development, through negotiating and agreeing bilateral and multilateral trade agreements with those countries, with support for businesses seeking sales from countries in the above-mentioned blocs.

"In addition, businesses are encouraged to invest in green, clean, and beautiful technology, with clear information about the production process to meet some of the strict requirements of the European market or requirements on carbon emissions or production processes. There are several important things like that at this stage.", Professor Vinh emphasized.

It is also important that Vietnam needs a strategy to transform its economic structure from current labor-intensive sectors to develop the economy, transforming from labor-intensive to high-tech; striving to increase the proportion of purely Vietnamese enterprises in the export structure.

Accelerate the strategy of developing domestic enterprises into multinational corporations with global status. Have policies to support small and medium enterprises, have an export strategy with appropriate steps.

Pay special attention to the domestic market with 100 million people, considering the domestic market as a strength. In addition, review and have tax exemption and reduction policies for US goods to create trust, demonstrating Vietnam's goodwill in developing trade relations with the US in the spirit of mutual benefit as the spokesperson of the Ministry of Foreign Affairs has declared.

Prof. Dr. Vo Xuan Vinh - Director of the Institute of Business Research (UEH) spoke at a workshop.

Need appropriate tax policy

Responding to the Vietnam Law Newspaper about whether foreign goods will flood into Vietnam when they are taxed too high in the US, Professor Vinh said that this is natural, with high tariff barriers, they will look for other markets like Vietnam.

So, what can Vietnam do to avoid losing market share? According to Professor Vinh, the long-term solution for Vietnam is to have appropriate tax policies; at the same time, improve the competitiveness of domestic enterprises.

Supermarket distribution channels help bring products to customers faster, at lower costs, and with better service.

To cope with the imposition of tariffs from the US and the wave of foreign goods that may flood into Vietnam, the solution for Vietnamese enterprises is to improve management capacity, invest in science and technology, innovate to have high technology, and produce at low costs. More importantly, Vietnam must create its own products to be globally competitive.

In addition, it is necessary to pay attention to diversifying distribution channels. Domestic enterprises need to cooperate with distribution chains such as supermarkets to have promotional and after-sales policies to bring products to customers at lower prices and better services. At the same time, take advantage of e-commerce channels and domestic logistics costs to reduce sales costs and bring products to customers at reasonable prices while still ensuring the quality of "Made in Vietnam".

Prof. Dr. Vo Xuan Vinh

Grassland

Source: https://baophapluat.vn/viet-nam-trong-boi-canh-my-dieu-chinh-chinh-sach-thue-quan-co-hoi-vang-de-can-bang-can-can-thuong-mai-post545048.html