US-China trade war entered a new phase, heavier after the United States officially announced the imposition of 25% import tax on many items from China, of which 90% of this item is the production material. According to experts, trade war between the two world's largest economies has a direct and indirect impact on Vietnam, as many of China's commodity lines are heavily affected by the tariffs, which are comparable to those of Vietnam. Vietnam's main exports to the US, so it is expected that some commodities in Vietnam can benefit directly.
Opportunity for exporting businesses
Pham Van Xo, Chairman of Binh Duong Import-Export Association, said that for Vietnam's exports, trade war between the US and China would create favorable conditions for Vietnamese goods to compete. With China's exports to the US, many of the Chinese-based manufacturers will now move to Southeast Asia, including Vietnam, to create more opportunities for Vietnam to attract investment. As a result, orders from China will move to non-high tariff countries from the United States, with tariff preferences for them to order, to avoid imposing tariffs in China.
Production line at Binh Duong Garment Company. Photo: PHUONG LE
According to Phan Le Diem Trang, Vice Chairman of Binh Duong Garment Association, Director of International Garment Company (Ben Cat Town), the long US-China trade war will lead to the investment shift of Major corporations have been investing in China to other countries, including Vietnam. As foreign capital inflows increase, more and more jobs will be created for laborers. For the textile and garment industry, In the face of increasing global taxation that will make US multinationals operating in China, Chinese domestic firms have a stronger incentive to divert orders and production operations. Export to other countries to avoid high taxes. Vietnam has a competitive advantage in the garment industry, so it will benefit in the US-China trade war. For example, after the United States imposed a high tariff on many items imported from China, the yuan devalued sharply against the dollar, so the renminbi also devalued against VND to help domestic firms enter. The fabric and textile materials are better prices. In addition, the Vietnamese apparel industry can gain more market shares in China in the US market thanks to more competitive prices.
Effective coping scenarios needed
In addition to the opportunities, the US-China trade war has a significant impact on exporters in particular and the Vietnamese economy in general. The United States and China are the two largest export markets of Vietnam, China is the largest import market of our country, so the trade tension between the two largest economies in the world certainly have no impact. Good to our economy. Therefore, experts believe that domestic enterprises should actively take appropriate measures to withstand the risks if any.
Trang believes that the current cost of production in Vietnam is high so it is not competitive with Chinese goods. In addition, domestic enterprises, especially garment enterprises, have not been able to source raw materials. It is worth mentioning, the rate of imported raw materials from China of domestic textile and garment enterprises is high, the Chinese market price increases when the importing enterprises Vietnam is absolutely able to take place. It shows that opportunities always come with challenges, so businesses need to prepare good human resources to take advantage of opportunities. For the International Garment Company, this time has not much influence from the US-China trade war, because the company has been operating for many years, the number of customers and orders are relatively stable.
According to Xo, trade war between the United States and China may also affect the currency in China, as it is likely that China will devalue the domestic currency, thus affecting commodity prices in Vietnam. South, in the direction of price will be higher. In addition, when high tariffs are imposed, many Chinese items will not be exported to the United States, leading to the influx of Chinese goods into neighboring countries. Neighboring countries are mainly from China. China will use this advantage to raise its prices. This situation will create a wave of protectionism, leading to the closure of some countries' economies, not the open economy. This will greatly affect countries like Vietnam.
Xo added that it is important to advise Vietnamese enterprises not to join hands with Chinese enterprises to turn Chinese goods into Vietnamese exports to other foreign markets. This will greatly affect Vietnam's goods.
Besides the opportunities and challenges to domestic enterprises when the trade war between the US and China took place. Many experts said that this fact requires Vietnamese policymakers to monitor, monitor, analyze and forecast in order to come up with different response scenarios. Enterprises should actively increase their capacity to take advantage of export opportunities; Sharp, sober screening investment projects, and avoid long-term consequences.
Reported by Phuong Le – Translated by Vi Bao
