Ways to enter the US market successfully

However, Mr. Vinh Nguyen, President of VBI Global, told our reporter that this challenge also presents a chance for companies to restructure, improve the value of their products, and look for new markets.

How do you think Vietnamese companies operating in the US market will be impacted by the US's new tariffs, if any?

Theoretically, if the United States increases tariffs on imports, Vietnamese goods will become less competitive in terms of price when compared to local goods or those from nations that are not subject to comparable taxes. Vietnamese companies might need to incur extra expenses to keep their market share in the United States. In order to counteract the price increase, this forces Vietnamese companies to adjust their business plans, such as entering new markets or raising the quality of their products.

But this is also a chance for Vietnamese companies to concentrate on enhancing technology, raising the value of their products, and developing their brand in order to gain sustained competitive advantages. Vietnam has played a significant role in the global supply chain in the current geopolitical context. It is quite difficult to replace Vietnamese goods in the short term, even while product costs have gone up. Vietnamese goods will thus continue to be available in the US market as long as companies maintain quality and satisfy customer preferences.

Vietnam has a distinct tariff edge over China, particularly when it comes to import levies, which range from 10 to 20%, whereas Chinese goods are subject to up to 60% in taxes. In order to maximize their competitive advantages, Vietnamese companies should also think about moving a portion of their supply chain or investing in the United States.

Which Vietnamese exports are least impacted, and which are most in danger, sir?

The potential imposition of anti-dumping penalties by the United States may pose significant obstacles for exports of goods such as frozen basa fish, shrimp, and interior wood. Additionally, things like plastics that are readily substituted with domestic products would also be greatly impacted.

Conversely, there is room for expansion in a few businesses, including textiles, handicrafts, seafood (apart from shrimp and basa fish), and agricultural products. This is a result of the United States' new immigration laws, specifically the removal of illegal workers, who make up a sizable portion of the workforce in many American manufacturing industries. The United States might welcome highly qualified Vietnamese workers, such as nurses in hospitals and assisted living facilities, to help close the labor shortage.

In addition to giving Vietnamese workers an opportunity, this strengthens trade ties between the two nations. Additionally, Vietnam should import more goods, including machinery, medicines, medical equipment, and high-tech items, in order to close the trade imbalance with the United States.

What strategies do Vietnamese businesses need to minimize the impact of the increasingly challenging U.S. market, sir?

First, Vietnamese companies must strictly avoid using Chinese products that are marketed as Vietnamese for export to the US in order to minimize tax risks. Not only does breaking this result in boycotts of Vietnamese products, but it also puts the entire business at serious risk if the United States slaps heavy taxes similar to those on Chinese goods.

Second, in order to attain more competitive pricing, Vietnamese companies must research cost reduction and production efficiency. Even if American enterprises wish to return manufacturing to the domestic market, they will find it difficult to compete when Vietnam's production costs are far cheaper.

Thirdly, high-quality products that satisfy American consumers' tastes must be produced. To capture the market and stay abreast of consumer trends, this calls for a presence or a group of agents in the United States. Whether they are run by the government (Commercial Office, Consulate) or private organizations and consulting firms like VBI Global, Vietnamese trade promotion centers play a crucial role in the United States.

Lastly, both sides of trade must be balanced. Vietnam must acquire more American commodities in order to prevent a significant trade surplus, which would be detrimental in the long run. Additionally, Vietnamese enterprises ought to think about purchasing or investing in American businesses. Having ready clients, having a staff that knows the market, and avoiding tariffs are the advantages of this course of action. Vietnamese companies may benefit in the long run from investing in the United States since the Trump administration has pledged to lower the corporate income tax from 21% to 15%.

Sincerely thank you!