Measures needed to adapt to US tariffs: Experts

An overview of the meeting in Ho Chi Minh City on April 8 (Photo: VNA)
 

 Economists underlined the need for Vietnamese Government and businesses to apply measures to adapt to the new tariff policy of the US to maintain growth during a meeting held by the Ho Chi Minh City Department of Industry and Trade on April 8.

Associate Professor Dr. Hoang Cong Gia Khanh, Rector of the University of Economics and Law under the Vietnam National University - HCM City, stated that the new US tariffs present several challenges for Vietnam, including the high trade imbalance between the two countries, exchange rates, counterfeit goods, intellectual property enforcement, and concerns about Vietnam being a "transhipment" hub.

Additionally, the new tariffs on imports from Vietnam will have a multi-layered impact on Vietnam's macro-economy, national budget, and the Vietnam-US trade balance.

Dr. Khanh suggested that Vietnam needs to actively deepen its integration and continue to effectively leverage new-generation free trade agreements (FTAs), invest adequately in forecasting, and develop contingency scenarios. Furthermore, Vietnam must be flexible in adapting to the "new normal," focusing on niche market development, improving product quality to meet higher standards, and attracting US investment, he stated.

On policy matters, the Government should continue to diversify markets and partners, develop supporting industries, ensure self-sufficiency in raw materials, enhance added value and competitiveness, strengthen institutions, and comply with international standards. Furthermore, the Government must take measures to monitor origin fraud, prevent goods from being falsely labelled as Vietnamese, implement a flexible exchange rate policy to weather capital outflows, and prepare social welfare policies to support workers, Dr. Khanh advised.

From the perspective of industry associations, a representative from the HCM City Textile and Garment - Embroidery Association stated that the swift and decisive response from the government has instilled confidence among the business community in coping with the new US tariffs. Specifically, the textile sector expects that in the short term, the new tariffs could be negotiated down to 20-25%, and the implementation period could be extended by 30-45 days to minimise the impact on goods already on their way to the US, said the representative.

A representative from the the Ho Chi Minh City Department of Industry and Trade addresses the meeting (Photo: VNA)

Nguyen Ngoc Hoa, Chairman of the HCM City Business Association, emphasised that the city's industry and trade sector must stay closely connected with the negotiation team, particularly the Ministry of Industry and Trade, to provide timely updates on the negotiation process and its official results. While the imposition of tariffs on Vietnamese imports is inevitable, the negotiation strategy should aim to achieve the most favourable tariff rates possible, he said, stressing that to withstand the new tariffs, it is crucial to reduce production costs to the lowest possible level, necessitating support measures for businesses during this period of uncertainty and volatility.

Representatives from other industry associations and businesses expressed high expectations for the government's negotiation team, saying they are awaiting official information regarding the new tariffs on Vietnamese goods. However, for imports from Vietnam to the US starting in May 2025, businesses are temporarily halting orders and will develop appropriate strategies to respond to the forthcoming tariff situation.

They also asked for targeted support measures from the Government, ministries and localities for specific sectors impacted by the new tariffs.

Experts held that businesses should also take initiative by seeking new export markets and expanding the domestic market, while viewing this challenge as an opportunity to restructure and redefine Vietnam's position in global trade, particularly in the US market.

Bui Ta Hoang Vu, Director of the municipal Department of Industry and Trade, acknowledged the importance of imports to the US market for businesses in the city and across the country. Therefore, industry associations and businesses must work closely with the department to propose practical solutions based on the realities of importing goods from Vietnam to the US.

Vu emphasised that the department would take into account the suggestions and proposals from industry associations and businesses and would advise the city’s People's Committee on how to address the situation effectively. The Department of Industry and Trade will also strengthen various support programmes for businesses, such as investment promotion, linking businesses with banks, and facilitating the adaptation of businesses to the new environment./.

VNA

Source:https://en.vietnamplus.vn/measures-needed-to-adapt-to-us-tariffs-experts-post313066.vnp