Our concerns have become a reality as the trade war erupts, with U.S. President Donald Trump imposing reciprocal tariffs on dozens of economies around the world, including strategic allies such as the UK, Europe, Taiwan, and more. Among these, the tariff rate that the U.S. intends to apply to Vietnam on April 9 is 46%, second only to the tariffs imposed on Cambodia, Laos, and Madagascar.
(Image of U.S. President presenting the list of reciprocal tariffs on various countries. Photo: REUTERS)
This high tariff rate will have a negative impact on the global economy in general and Vietnam in particular, especially under the lingering difficulties from the post-COVID-19 economic recovery, which has deeply affected income levels and purchasing power in the market.
The main reason that President Donald Trump has given is the trade surplus of these countries with the U.S. and the high tariffs imposed by these countries on U.S. goods, forcing the U.S. to impose reciprocal tariffs.
With an open economy like Vietnam’s, if this tariff rate is officially applied, it will create a huge shock and ripple effects across the economy. Industries that are heavily dependent on exports to the U.S. market, such as textiles, wooden furniture, footwear, and seafood, will be affected in many ways.
We are hopeful that the Government will come up with solutions. Deputy Prime Minister Ho Duc Phoc is expected to soon visit the U.S. and negotiate with the U.S. government, alongside already announced solutions such as reducing U.S. tariffs on goods imported from Vietnam and increasing imports of U.S. goods.
In the long term, We must find ways to achieve a balanced trade relationship between two countries based on the principle of “reciprocity.” The reality is that when we run a trade surplus with the U.S. or any other country, it only benefits us in the short term, and we always have to worry about being overly dependent on a large foreign market over which we have no control.
At Long Sinh, we have built long-term and sustainable trade partnerships with U.S. partners, and we are importing millions of dollars worth of goods from these partners each year. The growth rate of our imports from the U.S., including Artemia, feed, and aquaculture products, increases by over 10% annually, and we plan to further increase the revenue from U.S. products. This is also one way to support the government in balancing the trade relationship between the two countries.
In addition, seeking and expanding export partners in countries like Japan, Taiwan, Indonesia, and South Korea helps Long Sinh earn tens of millions of dollars in foreign currency every year, reducing dependency and mitigating the impact of exchange rate fluctuations. This approach also helps Long Sinh reduce the cost of imported goods like Artemia, Mackay feed, Flake, and other products from the U.S., providing affordable and stable prices for shrimp farmers and avoiding the negative effects of a rising exchange rate.
In any case, it is essential that the two countries find common ground and avoid high tariffs, as this would prevent a negative impact on Vietnam’s economy, which is already facing many challenges.
We hope for positive results from the upcoming negotiations.
(Cao Nguyen Quang Loc – Deputy CEO of Long Sinh Co., Ltd.)
