2 key industries affected
Mr. Vu Ha Son - Director of the Department of Industry and Trade of Can Tho City - informed that in 2024, the city's export turnover of foreign currency goods and services will reach more than 2.2 billion USD, an increase of 6.34% over the same period, exceeding the annual plan by 4.9%.
The city has 22 enterprises exporting to the US market with a turnover of more than 192 million USD, accounting for 11% of the city's total export turnover.
The Director of the Department of Industry and Trade also said that out of 6 groups of export products to the US market (rice, seafood, agricultural products and processed agricultural products, garments, handicrafts, steel and steel products), 2 garment and seafood industries will be greatly affected once the US imposes the 46% tax rate as expected.
Notably, the garment industry with export value to the US accounts for 39.4% of the city's garment export turnover (with the participation of 5 enterprises). The new tax rate could continue to reduce orders, putting businesses and workers in this industry in a more difficult situation, competing fiercely with other countries.
The seafood industry has 14 exporting enterprises to the United States and accounts for 16.37% of the city's total seafood export turnover. In the context of Vietnam's seafood competitiveness being lower than some countries (Ecuador, India), if the US applies a special tax increase, it could put many businesses in a difficult situation, directly affecting the supply chain and growers.
The problem of finding a new direction
According to the assessment of the Department of Industry and Trade of Can Tho City, if a 46% tax rate is applied to export goods of Can Tho City, the cost will increase by nearly half, losing the competitive price advantage compared to other countries that are not subject to tax or have lower tax rates.
City businesses may be forced to sharply reduce export volumes or temporarily suspend exports to the United States in the short term to avoid losses. It is expected that Can Tho City's export turnover to the United States will decrease in the last quarters of the year.
On the side of US partners, the risk of delaying or canceling orders from Can Tho businesses may arise due to concerns that taxes will increase prices. Enterprises that rely heavily on US export revenue face the risk of losses if they do not change direction to the market in time.
However, in the short term, US businesses may continue to import goods from Vietnam because they have not found an immediate alternative market, this could also be an opportunity for city businesses to grasp and make full use of.
Faced with this challenging situation, the leaders of the city's Department of Industry and Trade have urgently proposed many solutions to support businesses to overcome difficulties. In particular, diversifying export markets is considered a key solution, helping to reduce dependence on the US market by promoting penetration of other potential markets such as the EU, Asia, the Middle East and Africa.
In addition, specific support measures on tax reduction, credit support, exemption of transportation and logistics costs are also recommended to minimize the impact of tariffs and maintain competitiveness for businesses.
In the long term, improving product quality; proactively responding to trade defense lawsuits; promoting the localization of the supply chain; enhancing brand development and value for Vietnamese goods are considered important factors, so that Can Tho businesses can stay strong and develop sustainably in the volatile international market.
