A steel factory in Ba Ria-Vung Tau province. (Photo: VNA)
HCM City (VNS/VNA) - Many Vietnameseenterprises are keeping a close eye on the escalating US-China trade war andhave said the challenges from it outnumber the opportunities for them.
Chinahas recently announced plans to impose additional duties on 75 billion USD worthof American goods on September 1 and December 15.
US President Donald Trump tweeted the same day hisadministration would raise tariffs on 550 billion USD worth of Chinese imports.
The latest round of announcements means that bythe end of the year essentially all Chinese goods exported to the US will besubject to duties.
Dinh Cong Khuong, Director of Khuong Mai Steel JSCsaid that the HCM City Steel Business Club held its first “entrepreneurs' café”programme on August 24 to discuss opportunities and challenges faced by theindustry this year, reported the Nguoi Lao Dong (The Labourer) newspaper.
Most steel companies are aware that as the tradewar escalates, opportunities are less than challenges for them since they facea decrease in demand, he said.
Producers cannot reduce output since blastfurnaces have to operate non-stop, but demand is slowing down globally, andcompetition is becoming intense, he said. “If the trade war prolongs, itwill affect Vietnamese enterprises."
Diep Thanh Kiet, Vice Chairman of the VietnamLeather and Footwear Association, said the US President’s order that UScompanies should immediately start looking for alternatives to China, includingbringing their companies home, would have both positive and negative impacts onVietnam.
The Vietnamese footwear industry has a capacity ofover one billion pairs of shoes a year and needs 10 years to double it.
Meanwhile, China exports 1.7 billion pairsannually to the US. If even half of this is shifted to Vietnam, the industrycould not manage it, he said.
"Vietnam’s footwear industry exports 460million pairs of shoes to the US annually, and if the exports suddenly surge,the risk of attracting anti-dumping tariffs is very large."
According to experts and businesses, Chinesebusinesses in other sectors such as garment and textile, seafood andelectronics too want to switch their production to Vietnam to avoid the impactsof the trade war.
The shift poses challenges to Vietnamese firms whowould face fierce competition from the Chinese in many areas, from gettinghuman resources and land to prices, they warned.
Dr. Tran Dinh Thien, a member of the NationalMonetary and Financial Policy Advisory Council, said the trade war had causednegative effects on the trade, investment and monetary policies of manycountries, including Vietnam.
This requires the Government and businesses toforecast the long-term negative impacts to come up with appropriate measures,he said.
Tran Du Lich, member of the Economic AdvisoryGroup to the Prime Minister, said the US President’s order to US companies toimmediately start looking for an alternative to China would offer Vietnam theopportunity to attract investment from the US.
But for that, the country needs to further reformits institutions, he added.-VNS/VNA
