This time, can Vietnam withstand it?
According to Vietnam’s “Saigon Liberation Daily” report on December 23:
So far, Vietnam has nearly 93,500 companies went out of business, a year-on-year increase of 15.6%. The COVID-19 epidemic is complex and ever-changing, which is having a negative impact on the production activities of Vietnamese domestic enterprises.
As for the production field of textiles and garments, Vu Duc Giang, chairman of the Vietnam Textile and Garment Association, said that as of the end of November this year, the export volume of the textiles and garments field reached nearly 30 billion U.S. dollars. It is expected that this year’s Exports amounted to only US$35 billion.
Although the export volume in this field is quite stable, many textile and garment companies have begun to tire.
In fact, various companies are receiving orders, but the quantity is not large and the growth value is not high.
As for suit manufacturing companies, there have been no orders since the second quarter. Some companies must produce on a limited basis and at the same time switch to the production of masks and protective equipment. However, orders for the above-mentioned products are also decreasing day by day, as countries have transformed production and replenished the partial shortage of supply caused by the sudden increase in demand in the second and third quarters.
At the same time, Ruan Fangdong, deputy director of the Municipal Department of Industry and Commerce, revealed that this year is a year when companies have encountered many difficulties. Since the beginning of the year, nearly 30,000 companies in the city have closed down.
The city’s industrial production index will increase year by year, but the opposite will be true in 2020. The industrial production index for the first 11 months fell by 4.4% year-on-year. Among them, the processing and manufacturing industry fell by 5.1%, the electricity production and sales field fell by 1.5%, and the water supply and garbage treatment field fell by 0.4%. The production index in several areas fell by 22.9% year-on-year, such as wood processing, wood and bamboo and rattan products.
What is worrying is that economic difficulties are increasing.
Currently, enterprises across Vietnam and in this city are facing a crisis of shortage of imported raw materials, and at the same time, the export market has decreased, because several markets that were originally important partners of Vietnam are dealing with a new wave of The epidemic strikes, such as the European Union, Japan, South Korea, the United States, etc.
From another perspective, Chairman Vu Dejiang is worried that the proportion of exports between foreign direct investment (FDI) companies and domestic companies in many fields is increasingly relaxed. For example: in the field of textiles and garments, FDI companies account for 65% of exports and domestic companies account for 35%. For leather shoes and handbags, the export volume of FDI companies and domestic companies reached 73% and 27% respectively.
The United States launches 301 investigation into Vietnam’s textile and garment industry
According to a report by Vietnam’s “Youth Daily” on December 8, the United States The Office of the Trade Representative (USTR) has announced that it will launch a “301 investigation” into Vietnam’s textiles, clothing and footwear, which will open the door for the United States to impose punitive tariffs on imported products from Vietnam (including textiles, clothing and footwear). Reports believe that this will have a negative impact on Vietnam’s exports to the United States.
After receiving the news, the association composed of the Vietnam Textile Association and the Footwear Association immediately communicated with the American Apparel and Footwear Association (AAFA) and the American Footwear Retail Distribution Association (FDRA). AAFA and FDRA said they have advised the USTR to use caution to avoid supply chain disruptions.
The Association Alliance not only reiterated the “emergency situation” but also suggested that the Vietnamese government closely guide relevant ministries and industry associations to adopt the optimal protection plan to avoid multiple damages to textiles, clothing and footwear from the imposition of punitive tariffs.
Nevertheless, judging from the previous actions of the United States, it may be very difficult to get the country to give up imposing tariffs on Vietnamese products.
It is reported that the investigation hearing will be held on December 29.
The United States frequently attacks Vietnam’s trade
According to Vietnam’s “Investment Online” report on November 27 The Trade Defense Bureau of the Ministry of Industry and Trade of Vietnam announced that the U.S. Department of Commerce has officially notified that it will launch an anti-dumping investigation into Vietnam’s polyester textured yarn (PTY) products. The U.S. Department of Commerce will announce the preliminary investigation conclusions on April 6, 2021 at the latest.
In fact, as early as July last year, the United States was still “taking advantage of its busy schedule” to impose tariffs of up to 456% on some steel products exported from Vietnam to the United States, and also slapped Vietnam with “Exchange rate manipulator” label.
In early November this year, the U.S. Department of Commerce just imposed preliminary countervailing duties on Vietnamese cars and truck tires on the pretext of Vietnam’s “undervalued currency”. The United States also launched a “301 investigation” into Vietnam’s timber and exchange rate-related policies in October.
Data previously released by the National Bureau of Statistics of Vietnam show that in the first 11 months of this year, Vietnam’s total import and export volume increased by 3.5% year-on-year to US$489.1 billion, of which export volume increased by 5.3% year-on-year, and import volume increased by 1.5% year-on-year. .
The main driving force for the country’s export trade growth is undoubtedly the strong demand from the US market. Data show that in the first 11 months of this year, the United States has become the country’s largest export market, and Vietnam’s exports to the United States surged nearly 26% year-on-year to US$69.9 billion (approximately 457.5 billion yuan).
Some voices pointed out that the core reason behind these frequent actions by the United States is simply that the United States’ trade deficit with Vietnam cannot be sustained.
Vietnam-US trade surplus exceeds US$50 billion
Since the beginning of 2019, due to the increasingly fierce trade competition among countries around the world, Vietnam has successfully attracted many well-known large-scale international companies with its low labor force and geographical advantages, such as: responsible for Foxconn, which processes Apple mobile phone accessories, has found some new factory sites in Vietnam and is expected to be completed in early 2021; Samsung announced that it will build the world’s largest Samsung factory in Vietnam.
A large number of labor-intensive industries are in Vietnam The production not only made American companies make a lot of money, but importing various cheap raw materials from Vietnam has also become the first choice of American companies. This has also led to Vietnam’s huge trade surplus from its economic and trade with the United States.
From US$38.3 billion in 2017 to US$39.4 billion in 2018, and then to US$55.7 billion (approximately 366.3 billion yuan) in 2019, this number may be even higher in 2020 .
Data show that in the first half of this year, the United States was Vietnam’s second largest trading partner and the country with the largest trade surplus. In the first half of the year, Vietnam’s exports to the United States reached 30.3 billion US dollars, a year-on-year increase of 10.3%; during the same period, Imports from the United States were US$7.4 billion, a year-on-year increase of 7.2%, with a final trade surplus of US$22.9 billion.
As Vietnam’s main exporter, if the United States imposes punitive tariffs on Vietnam, Vietnam’s economy will inevitably suffer Be severely affected. According to 2019 data estimates, if the United States imposes a 25% punitive tariff on Vietnamese exports, it will be enough to reduce Vietnam’s economic growth by more than 1 percentage point.</p
