The US’s imposition of an additional 10% tax on Chinese imports from early March continues to raise concerns about global trade and new challenges, but not without opportunities.
The above comments were made at a trade promotion conference of the Vietnamese trade office system abroad organized by the Ministry of Industry and Trade on the morning of March 4.
A series of tax policies impact global trade
According to Mr. Do Ngoc Hung – Trade Counselor, Head of the Vietnam Trade Office in the US, in the past four weeks, US President Donald Trump has introduced policies, especially initiating unfair trade measures from global partners to have corresponding tariff policies.
The US announced an additional 10% tax, bringing the total to 20% on Chinese goods, a 25% tax on Mexican and Canadian goods, and a reduction in tariffs on Chinese postal items.
Thus, with the monitoring and consideration of imposing tariffs on aluminum and steel exported to the US under Section 232 on national security; the US is also investigating two wood products for national security reasons, planning to impose a 25% tariff on automobiles, pharmaceuticals and semiconductors, increasing trade defense investigation measures…
Analyzing these policy moves, Nong Duc Lai, Commercial Counselor and Head of the Vietnam Trade Office in China, said that the additional 10% tax on Chinese exports would have a huge impact on exports, reducing investment and consumption in this country.
In particular, most industries such as trade, employment, finance, currency, technology… are affected, causing difficulties for Chinese businesses and reducing the competitiveness of goods.
Faced with US countermeasures and tariff retaliation, Mr. Lai said China responded cautiously and flexibly.
Maintaining dialogue to reduce tension, developing multi-dimensional policies, and minimizing negative impacts.
Including domestic consumption policy, promoting the domestic market; reducing the required reserve ratio, reducing interest rates; increasing multilateral cooperation, expanding the market, promoting the FTAs participated in, increasing foreign investment…
These multi-dimensional reactions from major countries, according to the Vietnamese Trade Counselor in China, all have an impact on Vietnam’s economy and trade. Because these are all leading important trade partners, of which China is our country’s second largest export market.
What is the impact on Vietnam?
On the positive side, Mr. Lai said Vietnam could continue to welcome the wave of investment relocation. Vietnamese enterprises will have the opportunity to participate in the supply chain and become a production center. This wave will contribute to job creation and improving skills.
China’s stimulation of domestic consumption will help increase import demand, opening up more opportunities for Vietnamese goods to penetrate the market more deeply.
However, there are negative impacts when Chinese goods are restricted to the US and EU countries, they will have to find alternative markets, including Vietnam. This creates more fierce competitive pressure with domestic goods.
Pressure on the yuan exchange rate forces China to make adjustments to support exports. When this country shifts to other markets, it will produce lower-standard goods and compete for orders with other countries, affecting our exports.
Faced with the above reality, Vietnamese trade offices in the US and EU recommend that businesses and associations continue to proactively grasp information, closely monitor market and industry developments, and policy moves of the US and China to respond promptly.
At the same time, it is necessary to expand the market, effectively exploit FTAs, and maximize the potential of the Chinese market as it is still a huge market.
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Source: Vietnam.vn