The counterpart tax rate is "terribly" high, unprecedented
President Donald Trump signed a global countervailing tax decree on all goods entering the US, and raised the tax rate for more than 60 countries. In particular, a counterpart tax of 46% is applied to 90% of the total import of goods from Vietnam, the second highest among countries exporting to the US market, after Cambodia (49% tax rate for 97% of total export of goods to the US).
Speaking with Lao Dong, Dr. Mac Quoc Anh - Vice Chairman and General Secretary of the Hanoi Association of Small and Medium Enterprises assessed - the fact that the Donald Trump administration signed a decree to impose a global countervailing tax and especially a high tax rate of up to 46% on 90% of the total import of goods from Vietnam is a shocking development.
This information created a policy shock for the entire Vietnamese business community, especially export businesses. This is one of the most comprehensive, simultaneous and sudden trade defense measures by the US side in recent years.
First of all, we need to clearly recognize that this is not simply a specific anti- devaluation measure for a certain item, but a systematic policy.
The US selection of Vietnam as the country with the second highest tax rate (46%), after Cambodia (49%), shows a very clear "targeted" level. The imposition of a "global countervailing tax" method this time is unprecedented.
It does not rely on a specific investigation process of each industry, but is "common in nature", easily leading to major risks in legality, market confidence and damage to the Vietnamese investment - trade environment in the US" - Dr. Mac Quoc Anh assessed.
Mr. Ngo Sy Hoai - Vice President and General Secretary of the Vietnam Wood and Forestry Association expressed that this tax rate is "terrifying" and wood exporting enterprises are stunned by this information. Mr. Hoai hopes that Vietnam can negotiate in the near future.
Many businesses that cannot withstand the pressure may give up
Talking to Lao Dong, Dr. Nguyen Minh Phong - an economic expert assessed - the new US counterpart tax rate is bad news for Vietnamese businesses and the economy, especially in the context of facing difficulties in growth momentum. This tax rate will greatly affect businesses exporting to the US such as textiles, footwear, wood, etc., creating pressure on employment. There is even a risk that some businesses will have to give up, leading to a decrease in export market share to the US.
"Enterprises need to review and adjust operations, market share and costs to maintain the US market. The government needs to receive feedback from businesses quickly and coordinate in handling it, especially through negotiations and bargaining with the US. Enterprises need to quickly diversify export markets, increase flexibility and adaptability. We need to pay attention to negotiating and negotiating well with the US to find advantages over other countries" - Dr. Nguyen Minh Phong emphasized.
