Garment exports are one of the sectors that have been greatly affected by the US's reciprocal tax policy. In the photo: Sewing export goods at TNG Investment and Trading Joint Stock Company.

Market diversification

The US market currently accounts for more than 30% of the export turnover of enterprises in Thai Nguyen province, with key products such as: Garments, electronics (smartphones, tablets), auto parts, motorbikes, industrial machinery... When the new tax rate of 46% is applied to the US market, 10-22% higher than the current rate (depending on the type of product), enterprises are at risk of losing the US market to competitors, especially competitors from India and Indonesia.

In addition, the US's high tax on all markets could increase inflation, affect consumption, and thereby affect Vietnam's exports in general and Thai Nguyen province in particular...

From another perspective, Mr. Duong Van Thai, Chairman of the Provincial Industrial Parks (IPs) Trade Union, commented: Currently, enterprises in the IPs of the province are creating jobs for nearly 90,000 workers, with an income of 9-15 million VND/person/month. Most of the enterprises have export activities to the US. However, when exports from Vietnam are taxed at 46%, export costs are too high, these corporations may consider shifting investment to other countries with better trade incentives, leading to the risk of withdrawing capital or stopping investment expansion in the province. This will reduce employment opportunities, income, consumption and budget revenue.

In the above context, many export enterprises in the province have flexibly diversified export markets; made efforts to reduce finished product prices to increase competitiveness in the market. For example, TNG Investment and Trading Joint Stock Company - a unit specializing in exporting garment products to the US market (accounting for 30% of revenue structure), Mr. Nguyen Van Thoi, Chairman of the Board of Directors of the Company, shared: In 2025, TNG set a revenue target of 7,736 billion VND (an increase of 44% over the previous year). Of which, export turnover reached 358 million USD. In the immediate future, the US tax increase will not have much impact on the production and business activities of the unit. Because from the beginning of the year, TNG has made efforts to find and establish garment orders until the end of the second quarter of 2025. Before the information that the US imposed reciprocal taxes, we worked with all customers in the US who are importing TNG's goods, they all replied that they will continue to buy TNG's goods.

From now until the end of the year, TNG's policy is that all export markets will not exceed 30% market share, evenly distributed, avoiding risks when there are fluctuations. For example, in the US export market, by the time of orders until July 2025, TNG will only reach 26-30%.

Similarly, at some other garment export enterprises, such as Thanh Hung Garment Joint Stock Company; TDT Investment and Development Joint Stock Company..., we noted that production activities are still stable, maintaining the growth target for the whole year. Accordingly, these units are also actively expanding their search for export markets to Russia, South Korea and some Asian countries to reduce dependence on the US.

At Minh Bach Company Limited (in Song Cong City) - specializing in exporting forklift counterweight equipment, Ms. Trinh Thi Huong, Deputy Director of the Company, shared: On average, the Company exports 2,000-2,500 tons of products to the US market each month. If the US increases the tax rate to 46%, Minh Bach's products cannot compete because there is no profit. Currently, we have temporarily suspended export shipments for April 2025 to wait for the negotiation results between Vietnam and the US. In case the tax rate remains the same, the unit will have to negotiate with partners to receive sharing and support on production costs.

Production of high voltage wires for cars at Hansol Harness Vina Co., Ltd. (Song Cong II Industrial Park). Photo: TL

Continue to negotiate and support businesses

In reality, the US's application of a 46% reciprocal tax on Vietnamese goods is mainly aimed at reducing the trade deficit. At the same time, Vietnamese goods exported to the US mainly compete with third countries, not directly with US enterprises in the US market. Therefore, along with the enterprises' own solutions, the Government is making efforts to negotiate with the US to reduce the tax rate, thereby supporting enterprises.

On the evening of April 7, Prime Minister Pham Minh Chinh chaired a meeting with ministries and sectors to update the situation with new developments, and continue to discuss solutions after the US announced reciprocal tariffs on goods from many countries, including Vietnam. This was the third meeting of the Government leaders with ministries and sectors in the past 5 days.

At the meeting, Prime Minister Pham Minh Chinh stated that Vietnam requested the US to postpone imposing tariffs on Vietnam for at least 45 days to negotiate, prepare and transition. This also helps Vietnam approach and negotiate with the US to reach a bilateral agreement, moving towards a sustainable trade balance that benefits both sides, without affecting Vietnam's international commitments.

Previously (on the night of April 5), right after the meeting of the Government Standing Committee, Deputy Prime Minister Ho Duc Phoc left for the United States to negotiate to reduce the tax rate to 0% with the spirit of "adapting to all changes with the same attitude". The Government's quick response is expected to bring about more favorable negotiation results for Vietnam, given the very high tax rate that the US Government announced to apply. The business community also expects to have positive information to plan appropriate responses.

According to experts, along with negotiating tax rate adjustments, ministries and sectors need to continue to effectively implement cooperation mechanisms and bilateral agreements with the United States; concretize the increase in imports of some of the United States' strong products, in line with Vietnam's needs, thereby conveying a positive message, demonstrating Vietnam's readiness to adjust the trade balance in a balanced, harmonious and mutually beneficial direction.

Regarding export enterprises in general, experts recommend that it is necessary to increase the grasp and update of information to regulate business strategies and respond promptly; strictly comply with regulations on origin and labor safety to effectively take advantage of free trade agreements that Vietnam has signed to diversify export markets; consider the possibility of negotiating with importers to share the burden of reciprocal taxes, support enterprises to overcome this difficult period...