VCN - The US-China trade war is creating unpredictable developments and hampering the flow of global trade in goods. Therefore, Vietnamese import-export enterprises need to assess and analyse to take advantage of opportunities as well as avoid consequences from these fluctuations.
|US-China trade war a boon for Vietnam: banking insider|
|Vietnam prepares to reap benefits of US-China trade war|
|How does the US-China trade war affect the exchange rate and trade of Vietnam?|
|Enterprises should seek solutions to cope with trade wars. Photo: H.Diu|
Pay attention to origin
According to experts, the US-China trade war may have significant impacts on Vietnam's economy, including advantages and disadvantages. The advantages are to create more opportunities for Vietnamese exports to the US, when Chinese goods are subject to high taxes in this market. Some enterprises have predicted that sales to the US are estimated to increase by 10%, because they have received many orders from US customers who used to buy products from Chinese manufacturers. But the disadvantages are remarkable, when Chinese goods are not exported to the US market, they may be exported to Vietnam, raising the risk of trade deficit with China. Moreover, increasing the opportunity for Vietnamese exports to the US means increasing the risk of facing trade defence lawsuits, because Vietnam is near to China, it will easily lead to doubts about fake origins to avoid taxes.
Therefore, businesses must take the initiative in business plans to "avoid" this trade war, and its negative impacts on production.
According to a representative of Thien Minh Trading, Service and Import Export Co., Ltd the US is a big market so there are many opportunities for Vietnamese enterprises to increase exports. However, to avoid troubles when the US market becomes more cautious, enterprises must comply with rules and regulations not only on quality and origin of goods but also on labour, hygiene standards and factories.
A representative of a company specialising in steel production also said that enterprises are making efforts to find ways to improve the added value for products through the application of technology as well as production of new products. In particular, he stressed that enterprises must be transparent about the origin of materials and products to increase the strength to overcome risks in the context of fluctuating global trade, and avoid "losing at home".
Take advantage of "reserves"
Although increasing the activeness to respond the trade war is necessary, if the US-China trade war is escalating, how to avoid this war is a concern. The good news is that enterprises are aware of diversifying products and markets for imports and exports. Accordingly, many enterprises said that they have used raw materials from domestic enterprises, factories or imported from international markets other than China such as Malaysia, India and Thailand. In addition, they also pay attention to finding new and potential export markets in Africa and South America.
Regarding this, Director of the Center for WTO and Economic Integration under Vietnam Chamber of Commerce and Industry (VCCI) Nguyen Thi Thu Trang said enterprises should monitor the situation to respond to each change; seek opportunities and focus on niche markets. In addition, she suggested that enterprises take advantage of free trade agreements to increase opportunities for commercial activities. Typically, the Regional Comprehensive Economic Partnership (RCEP) between the 10 member states of the Association of Southeast Asian Nations and the six Asia-Pacific states, including China. She said that RCEP could be a "reserve" benefit for enterprises in the risk of protection in other major export markets and US-China trade tension.
|Enterprises need to be proactive in the impact of US-China trade war
VCN – Experts recommend that Vietnamese enterprises, especially exporters must take the initiative in responding to the ...
The above comments show that not only enterprises but also management agencies are planning for all scenarios of the trade war. However, enterprises expect to receive more support from management agencies to get early warnings about possible consequences. An expert also said management agencies should actively support enterprises, especially small and medium enterprises in accessing capital and building high quality Vietnamese brands; apply stricter food hygiene and safety conditions and encourage the development of clean and high quality agricultural products to compete with Chinese products.
By Huong Diu/ Huyen Trang