US imposes tax on Chinese goods, affecting Vietnamese businesses

Chinese and South Korean partners in June unexpectedly announced the cancellation of contracts signed with Zara, a yarn producer in Dong Nai province.

Since the US has now imposed a high tariff on Chinese products, the textile and garment partner is finding it difficult to enter the US market.

US imposes tax on Chinese goods, affecting Vietnamese businesses



The company has incurred big losses because of exchange rate fluctuations, which increased cotton prices. Since March, Zara’s mill has been running at just 40-50 percent of capacity, hoping that new policies will change the situation.

“There are only 100 spinning mills in Vietnam, and most of them are facing b'difficulties,” said Luong Vu Ngoc Duy, director of Zara.

Vu Duc Giang, chair of the Vietnam Textile and Apparel Association (Vitas), confirmed that because of the trade war, enterprises in the textile and garment industry are having oroblems, especially in exporting yarn to China.

Since the US has now imposed a high tariff on Chinese products, the textile and garment partner is finding it difficult to enter the US market.

In previous years, Vietnam exported more than $3 billion worth of yarn each year, including $2.4 billion to China. But now, Chinese enterprises have reduced t'yarn imports, because their textile and garment exports to the US have been cut as a result of the high taxation. They also have tried to force the price down by 15 percent.


Vu Thanh Tu Anh, a respected economist, commented that the US-China trade war has dealt a blow to the exchange rate.

The Chinese yuan has depreciated against the US dollar, which means an appreciation of the Vietnam dong against the yuan. This is why more Chinese products have entered Vietnam and why it is more difficult to export to China.

The negative impact caused by the trade war can be seen not only in the garment industry, but also in other business fields. Vietnam’s exports to China have dropped sharply, especially in farm, forestry and seafood produce.

According to the Vietnam Chamber of COmmerce and Industry (VCCI), Vietnam’s farm produce exports have decreased by 9.7 percent, and seafood 3.9 percent compared with the same period last year.

 


“The export decrease can be seen in all markets, not only in China,” Nguyen Thi Thu Trang, director of VCCI’s WTO and Integration Center, noted.

Vietnam had a 7.1 percent growth rate in export by mid-June 2019 compared with the same period last year, a relatively modest figure, according to the General Department of Customs (GDC).

Rong Viet Securities has predicted that Vietnam’s export growth rate in 2019 may, for the first time in the last decade, be lower than the nominal GDP growth rate.

GDC predicted that Vietnam’s exports would grow by 8 percent this year, lower than the 14 percent figure in 2018. 

Mai Chi

Trade war heats up Vietnam’s realty market

Trade war heats up Vietnam’s realty market

Foreign firms usually apply the ‘China+1’ model, which means that they build a facility in China and then look for a new destination to become an intermediary location or to serve as a target for expansion and relocation in the future.

Vietnam buying more materials from the US amid US-China trade war

Vietnam buying more materials from the US amid US-China trade war

The US-China trade war is giving opportunities to Vietnam to diversify material supply sources, increase imports from the US to reduce the trade surplus with the country, and reduce the trade deficit with China.

 
 

Other News

.
Vietnam’s estate companies seek investment opportunities in foreign markets
Vietnam’s estate companies seek investment opportunities in foreign markets
BUSINESSicon  15/02/2020 

More and more domestic real estate firms have begun to seek investment opportunities in global markets, according to Savills Vietnam.

Bad debts may increase amid coronavirus outbreak
Bad debts may increase amid coronavirus outbreak
BUSINESSicon  15/02/2020 

Bankers anticipate that the coronavirus outbreak will affect the business of many of their clients.

Hundreds of enterprises may have to suspend production because of coronavirus
Hundreds of enterprises may have to suspend production because of coronavirus
BUSINESSicon  15/02/2020 

Hundreds of enterprises, both Vietnamese and foreign invested, are increasingly concerned about supply of components from China.

Enterprises stii need more workers after Tet
Enterprises stii need more workers after Tet
BUSINESSicon  16/02/2020 

Enterprises in HCM City, Binh Duong and Dong Nai complain that they have not been able to recruit workers since Tet.

Virus rouses food safety awareness in Vietnam
Virus rouses food safety awareness in Vietnam
BUSINESSicon  15/02/2020 

Supermarkets and retailers in Vietnam are making bank from the public rushing to stock up on indispensable food supplies, which could ultimately push forward an increase in awareness of food handling and safety.

Plastic packagers looking to Vietnam
Plastic packagers looking to Vietnam
BUSINESSicon  14/02/2020 

The unfavourable prospects of the Thai packaging industry, dimmed by the ban on single-use plastic bags in the country, may force packaging manufacturers to shift business to nearby markets like Vietnam.

Foreign investors look forward to Vietnam’s imminent IPOs in 2020
Foreign investors look forward to Vietnam’s imminent IPOs in 2020
BUSINESSicon  14/02/2020 

Nearly 100 Vietnamese companies will need to hit the road for share auctions by the end of 2020 to meet the government’s target of privatizing state firms.

More than 800 firms stop operating or scale down because of coronavirus
More than 800 firms stop operating or scale down because of coronavirus
BUSINESSicon  15/02/2020 

More than 800 businesses and 8,700 employees have been affected by the novel coronavirus epidemic, according to the Ministry of Labour, Invalids and Social Affairs.

PM Phuc allows border gates to re-open
PM Phuc allows border gates to re-open
BUSINESSicon  14/02/2020 

Prime Minister Nguyen Xuan Phuc approved the resumption of imports, exports and transport of goods through three sub-border gates between Vietnam and China to help local firms.

VN industrial sector’s growth likely to slow down due to COVID-19
VN industrial sector’s growth likely to slow down due to COVID-19
BUSINESSicon  14/02/2020 

Growth of Vietnam’s industrial sector is likely to slow down in the first quarter of 2020 due to negative impacts from the acute respiratory disease caused by a novel coronavirus (COVID-19), according to the General Statistics Office (GSO).

VN to issue lists of preferential tariffs under EVFTA
VN to issue lists of preferential tariffs under EVFTA
BUSINESSicon  14/02/2020 

The Vietnamese Government is set to issue a decree on the lists of preferential export tariffs and special preferential import tariffs to implement the EU-Vietnam Free Trade Agreement (EVFTA) when the deal comes into force in Vietnam.

New driving force for Vietnam-EU relations
New driving force for Vietnam-EU relations
VIDEOicon  14/02/2020 

The European Parliament has ratified the EVFTA and the EVIPA. The ratification has opened up new horizons for more intensive, comprehensive and effective bilateral cooperation 30 years after the establishment of diplomatic ties.

Two scenarios for Vietnam’s economic growth
Two scenarios for Vietnam’s economic growth
BUSINESSicon  15/02/2020 

If the nCoV epidemic lasts a long time, the GDP is expected to decrease.

BUSINESS NEWS HEADLINES FEB. 14
BUSINESS NEWS HEADLINES FEB. 14
BUSINESSicon  14/02/2020 

Large retail formats to dominate HCM City’s retail market

Vietnam says to ratify EVFTA in May
Vietnam says to ratify EVFTA in May
BUSINESSicon  13/02/2020 

The EVFTA will be ratified in May and take effect in July this year if everything fares well, said Minister of Industry and Trade Tran Tuan Anh.

Japanese firm to attract Vietnamese workers via football
Japanese firm to attract Vietnamese workers via football
BUSINESSicon  14/02/2020 

Japanese electronic device maker Lion Power is tapping into football’s popularity in Vietnam as a way to recruit technical trainees amid a labour shortage in Japan, reported the Asian Nikkei Review.

COVID-19: Mong Cai completes preparations to resume border trade
COVID-19: Mong Cai completes preparations to resume border trade
BUSINESSicon  13/02/2020 

Mong Cai city in Quang Ninh has basically completed preparations to resume trade through the Mong Cai International border gate, after a suspension due to the outbreak of coronavirus (COVID-19).

BUSINESS NEWS HEADLINES FEB. 13
BUSINESS NEWS HEADLINES FEB. 13
BUSINESSicon  13/02/2020 

Ministries seek new export markets for farm produce

EVFTA, EVIPA unleash market potential for European firms
EVFTA, EVIPA unleash market potential for European firms
BUSINESSicon  13/02/2020 

The EU-Vietnam Free Trade Agreement and the EU-Vietnam Investment Protection Agreement offer significant business opportunities for European enterprises, German Federal Minister for Economic Affairs and Energy Peter Altmaier said.

VN’s GDP growth to reach 6.25 percent if COVID-19 outbreak is contained in Q1
VN’s GDP growth to reach 6.25 percent if COVID-19 outbreak is contained in Q1
BUSINESSicon  13/02/2020 

Vietnam’s gross domestic product (GDP) growth is expected to reach 6.25 percent in 2020 if the outbreak of coronavirus disease (COVID-19) is contained within the first quarter of this year, according to the Ministry of Planning and Investment.

 
 
 
Leave your comment on an article

OR QUICK LOGIN