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| At a furniture production factory in Quy Nhon city__Photo: VNA |
Amidst the US’s decision to delay new import tariffs for 90 days, Vietnamese businesses are taking advantage of this opportunity to implement both short-term and long-term solutions to minimize potential negative impacts.
Many industry experts view this challenge as a chance to restructure production process and enhance competitiveness.
Maintaining market position amidst tariff threats
According to the Vietnam Timber and Forest Product Association (Vietforest), wood exports to the US reached USD 8.8 billion last year, accounting for over 50 percent of the industry's total export turnover. Despite the temporary tariff delay, many businesses remain cautious about the future.
Solutions should be outlined to maintain foothold in the US market, it said, elaborating if foreign-invested enterprises, who account for nearly 70 percent of total export earning, withdraw from Vietnam, it would cause unwanted impacts across the entire industry.
Vice President of the Vietnam Cashew Association (VINACAS) Tran Van Hiep noted that despite declining export turnover in recent years, the US remains a major market for Vietnamese cashews with export values reaching approximately USD 1.1 billion in 2024, or over 21 percent of total industry exports.
Among more than 60 countries where Vietnamese cashew nuts are destined for, the US will likely remain a large market with diverse demands despite tariff challenges. Therefore, it is necessary to make every effort to maintain this market and maximize exports within capabilities, said Hiep.
Meanwhile, Vice President of the Binh Duong Ceramics Association Vuong Sieu Tin reported that the US market alone accounts for some 70 percent of the province’s ceramic export turnover, with several major partners consistently placing large orders over many years.
He said the US has increased import tariffs on Vietnamese ceramics from 6 percent to 16 percent but the rates remain acceptable for businesses.
The US has always been a major market for Vietnamese ceramics. As a product facing limited competition from other markets and less subject to US investigations, the ceramics industry expects to secure favorable tariff rates, he added.
In the meantime, fruit and vegetable businesses reported that exports to the US account for 9-10 percent of the industry's total turnover, making it their second-largest market after China.
The Vietnam Fruits and Vegetable Association (VINAFRUIT) said that the US is set to hefty tariffs on Vietnamese fruits and vegetables, making them less competitive than rivals from Thailand, Malaysia and India, which are enjoying lower taxes.
Short and long-term solutions
VINAFRUIT Chairman Nguyen Thanh Binh, said fruit and vegetable exports to the US increased by more than 60 percent year-on-year in the first months of 2024. Recognizing the significant potential of this market, businesses are implementing various solutions.
The association is planning to propose the Government’s support in promoting new markets and assistance with taxes and bank interest rates, including extended loan periods, so that businesses facing export difficulties have financial flexibility.
Among short-term measures, Binh noted that many businesses are working with partners to increase shipments during the 90-day tariff delay period to avoid inventory buildup and higher tariffs if negotiations fail.
Similarly, cashew enterprises are accelerating exports to take advantage of the US’s postpone. A business representative revealed that cashew nut exports to the country have increased by 30 percent since early April compared to the same period last year, and this growth trend will continue until mid-July when the tariff delay expires.
According to Hiep, VINACAS is rushing off its feet to support enterprises with market expansion, which requires them to diversify their offerings to satisfy the taste of each market.
The Vietforest said that businesses are urgently seeking affordable raw material sources, restructuring costs to enhance competitiveness, and reviewing industry and product codes to focus production on items likely to receive US tariff preference. Besides, they are exploring new markets with growth potential such as India, the Republic of Korea, Japan, and Europe.
While acknowledging challenges, Tin suggested that tariff pressures, though difficult, provide an opportunity for businesses to reassess their capabilities and adapt production methods to improve efficiency and competitiveness.
For ceramics, with the US and China sharply increasing tariffs on each other, there's potential for more US customers to leave the Chinese market and come to Vietnam for imports, especially for products that few countries can produce, he stated.- (VNA/VLLF)
