The US-China trade war is difficult to end quickly when the two economic superpowers constantly create storms with action and threaten to take action. New cyclones are constantly appearing, spilling over, undermining efforts to promote global economic growth and trade fairness. As the second most open economy in the region and a major trading partner of both China and the US, Vietnam will be hard to avoid the consequences if there is no active response scenario.

Lesson 1: The fight outside the heart of the storm


After nearly 2 years of escalating US-China trade conflict, many of Vietnam’s major export industries face the risk of being contagious due to origin fraud and tax evasion. This out-of-storm battle is equally intense, with serious disaster.

The risk of manifestation

The list of 13 items exported to the US, EU and Canada markets at risk of investigation of trade defense and tax evasion has been sent to the People’s Committees of provinces and cities by the Ministry of Industry and Trade. The list is classified by 4 levels of alert.

At the highest level is level 4 (need to conduct close monitoring, checking the activities of related businesses), with plywood using hardwood materials. At alert level 3, there are 6 items, including artificial stones, iron racks, foam cushions, electric bicycles, truck and passenger car tires, and corrosion-resistant steel.

The reason is the sudden increase in export volume to the US market of the above items.

At the meeting of the Ministry of Industry and Trade to implement Decision No. 824 / QD-TTg on strengthening the state management of evading trade remedies and origin fraud in early July 2019, the whole The Director of the European-American Market Department and the Director of the Asia-Africa Department emphasized the hot growth of some Vietnamese exports to the US market in the first half of 2019, including wooden products with a few dozen percent increase. They are concerned and propose to check to clarify the suspicion of fraud, evasion, counterfeiting certificates of origin (C / O) to benefit greatly from the origin.

By the end of September 15, 2019, the total export value of FDI enterprises reached 124.48 billion USD, up 4.7% (equivalent to an increase of 5.6 billion USD) over the same period in 2018. and account for 68.5% of Vietnam’s total merchandise export value.

Previously, the Department of Economic Security (Ministry of Public Security) stepped in, conducted verification and made a comment that Vietnamese enterprises imported plywood from China, then processed for export. or sell to other businesses exporting to the US.

Even the US Customs has discovered that FINEWOOD Vietnam has imported plywood from China, then sent to the factory to change its Vietnamese-origin label and export to the US. Not only that, this enterprise has acts of counterfeiting C / O issued by Vietnam, but actually goods are not imported into Vietnam or goods exported out of Vietnam (counterfeiting C / O). from outside the territory of Vietnam).

Tiếp tục “xuống nước”, Trung Quốc sẽ miễn thuế bổ sung với mặt hàng nông sản từ Mỹ

Never before, the control of origin of C / O must be respected as it is now, when products exported to Vietnam’s key markets are at risk of being heavily disguised. According to statistics of the Vietnam Chamber of Commerce and Industry (Ministry of Industry and Trade), in the first 8 months of 2019, there have been 7 investigations of Vietnam’s export goods. Items under investigation include aluminum, steel, plywood, household goods, seafood, and solar cells.

In addition, the 13 items on the warning list are the same items that the US has initiated anti-dumping and countervailing investigations for products imported from China many years ago and not only. once. The anti-dumping and official anti-subsidy tariffs imposed on these Chinese products are very high.

Back to the only product at warning level 4 – plywood using hardwood materials, the Ministry of Industry and Trade has also sent a letter to the Prime Minister on strengthening the management of plywood exports to the US.

In this document, the Ministry used data from the Vietnam Timber and Forest Products Association (Vifores) that in 2018, Vietnam’s plywood production exceeded the capacity of 36 domestic factories to more than 500,000 m3, also As mentioned, the root cause of this 500,000 m3 is due to commercial activities.

From a state management perspective, the Ministry of Industry and Trade was forced to propose to the Prime Minister a series of solutions, firstly to formulate and issue a Circular on suspension of border-gate transfer business and temporary import business. plywood imported to Vietnam, then re-exported to the US, followed by consulting ministries and agencies on the construction of a circular stipulating that traders exporting plywood to the US must register the code of exporter …

The customs office has also put 4 enterprises out of 6 enterprises that Vifores provided in the red channel list to strengthen the management and strictly control export and import procedures. These are Vietnamese businesses that were questioned by the US side and conducted investigations for violating US anti-dumping and countervailing duties on hardwood plywood products from China. The list includes 2 businesses in Hanoi, 1 enterprise in Hung Yen, 1 enterprise in Nam Dinh, 1 enterprise in Lang Son and 1 enterprise in Phu Tho …

Enterprises in the industry have to accept the fact that they will have to curb growth. “If the growth is faster, the risk of evading trade is greater, the risk is extremely,” Mr. Dien Quang Hiep, Chairman of Binh Duong Timber Processing Association (BIFA) admitted.

But, this also means that the target of 20 billion USD of exports for the national wood industry by 2025 (accounting for 10% of the global wooden furniture market) and beyond Vietnam will become the world’s furniture center. so far away. Vietnam is currently in the top 5 in the world in terms of export value of wood and wood products, after China, Germany, Italy and Poland, with about 6% market share.

The problem is that the “tit-for-tat” attacks in the US-China trade war will continue to escalate, many Chinese industries will be taxed to 30%, so the tax difference with goods originating from Vietnam is larger. Economic experts warn that the risk of illegal goods transportation and origin fraud will increase sharply, not limited to any sector or field.

TS Pham Sy Thanh, Director of the China Economic Research Program (VCES) of the Institute for Economic and Policy Research (VEPR), said that trade war has a negative impact that few people pay attention to. reducing the effects of Vietnam’s free trade agreement (FTA). The advantage of preferential tax rates when signing FTAs ​​(which the signing of trade-offs with many incentives for foreign enterprises) is only promoted when enterprises have valid C / O certificates.

Even the fact that Chinese goods cheat on the origin of Vietnamese goods has made the “market managers of the US” underestimate the value of C / O and be more wary of Vietnamese goods.

“Without good measures to handle, other markets such as Europe or Japan will also have a different approach to Vietnam exports,” said Dr. Into alert.

Chuyên gia Trung Quốc: Thương chiến có phá vỡ được bế tắc hay không phụ thuộc vào ông Trump

There are foreign enterprises “favorable”

In addition to the “transit” of goods directly through Vietnam, there has appeared a situation of foreign enterprises “hiding” in investing in C / O to export plywood to the US market in order to avoid taxes.

Experts have said so when observing the situation of import and export of Vietnam from the beginning of the year until now. In particular, it can be seen that, in the FDI sector, there are groups that will benefit greatly from the US-China trade war.

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By the end of September 15, 2019, the total export value of FDI enterprises reached 124.48 billion USD, up 4.7% (equivalent to an increase of 5.6 billion USD) over the same period in 2018. and account for 68.5% of Vietnam’s total merchandise export value.

In many groups that Vietnam has advantages (such as clothing, furniture), FDI enterprises have been encroaching and won many export orders within the past year.

As many groups of foreign businesses benefited greatly, increasing their investment, the pressure on the remaining aspects of the economy became more apparent, such as exchange rates, commodity origin problems, and tactics of only Import and export of China.

At this time, the question “What does Vietnam really gain from the war” has gradually fallen.

Still the story of the wood industry, the export of wood industry to the US reached US $ 4 billion, but in the wood processing industry, Vietnamese enterprises account for only 43%, the rest belongs to foreign enterprises, mainly belong to enterprises. FDI from China.

The statistics also show that, in the first 5 months of 2019, about 60% of FDI projects have just invested in the wood industry in the field of wood processing, with 32 projects. In particular, China alone accounted for 23 projects, but the capital scale was just over 2 million USD, much smaller than the average scale of each project in the same period in 2018 (4.2 million USD).

Or like the textile industry, the US is the market that Vietnamese enterprises are sharing with Chinese enterprises the most (the US imports from China 40%, from Vietnam 15%). The latest imposition of US $ 267 billion in consumer goods such as textiles, phones, etc. creates opportunities for Vietnam to increase exports. But, exports are mainly from enterprises with investment from China.

TS Nguyen Thi Thu Trang, Director of the WTO and Integration Center (VCCI), pointed out many signs that Vietnam is not necessarily a beneficiary of this trade war. In particular, the capital flow movement in the war of war has many inaccuracies.

According to Ms. Trang, foreign investment is indeed withdrawing from China because of the US-China trade war. However, they are also returning to the production strategy in China to consume for this market. Investors withdrew were export units to the US.

In addition, where will the capital from China go, other countries or Vietnam, depends on the business strategy of enterprises, even if Vietnam is assessed as a country with an investment-business environment. Business improvement fastest (in a relative sense).

Unpredictable developments in the US-China trade war have increasingly affected the export processing industries of Vietnam, in wars outside the heart of the storm. The problem is an opportunity or a risk has been identified. The prevention and restriction of risks in trade, especially frauds originating in this sensitive time, must be a top priority of the parties concerned.

The Chinese trade negotiating delegation suddenly left the US earlier than expected

From September 19 to September 20, the deputy-level trade delegation between China and the US met in Washington (USA). The meeting is expected to prepare for a high-level trade talks between the two sides in Washington in early October 2019.

Nicole Rolf, Director of National Affairs of Montana Department of Farming, said that on September 20 (local time), the Chinese delegation suddenly changed the schedule and returned home earlier than expected. few hours.

According to the schedule, Chinese officials will visit farms in Montana and Nebraska in the US next week. This was an iconic act of goodwill, but was ultimately canceled at the last minute.

The Xinhua News Agency on Friday reported that China’s State Council’s Tariff Commission will waive additional customs duties on agricultural products from the United States, including soybeans and pork. .

“According to the State Development and Reform Commission and the Chinese Ministry of Commerce, the US has decided to revise tax increase orders on goods imported from China to the US. China will support related businesses. It is important to ensure that they comply with market principles, ”said the State Council’s Tariff Commission.

According to the Xinhua News Agency, the Tariff Commission will repeal additional tariffs on soy milk, pork and other agricultural commodities from the US.

The State Council’s Tariff Commission also noted that the Chinese market is broad and the prospects for importing high-quality agricultural products from the US are huge.

The agency expressed that China hoped that the US would keep its word, fulfill its obligations and create favorable conditions for cooperation between the two countries’ agricultural industries.

Before the next round of trade talks scheduled to take place in early October in Washington, September 11, Beijing suddenly took a “downward” move when it released a list of 16 categories of imported goods. from the US will not be subject to additional tax from September 17 and will be valid for 1 year.

Shortly thereafter, President Donald Trump also announced on Twitter that the US agreed to postpone the increase in taxes (from 25% to 30%) on USD 250 billion of goods imported from China within 2 weeks on the occasion of National Day. China.

Mr. Trump called this a gesture of goodwill for China and also at the request of Deputy Prime Minister Liu He.

US President Donald Trump announced on August 1 that he would impose a new 10% tax on US $ 300 billion of goods imported from China since September 1.

According to the US leader, this decision was made because China did not fulfill its promise to increase US agricultural purchases.

In response, China temporarily stopped importing agricultural products from the United States and stated that it did not exclude the possibility of increasing import duties on these goods.

Doanh nghiệp Mỹ vẫn chọn Trung Quốc, bất chấp thương chiến tăng nhiệt

China is one of America’s largest agricultural export markets and US farmers have been hit hard by Beijing’s retaliation for Washington’s tariff policy.

The story of agricultural products is one of the problems in the trade war between the two largest economies in the world. Mr. Trump has always repeated that Beijing does not deliver on its promises.

In a statement on Thursday, Gao Feng, a spokesperson for China’s Ministry of Commerce, said some Chinese businesses had begun asking the US to quote some agricultural commodities.

In response to Beijing’s move, in an interview with CNBC on September 12, Treasury Secretary Steven Mnuchin said that the US expects to buy Chinese agricultural products and that the US considers the delay to be a direct attack on farmers. this country.

In the context of the US-China trade war, American multinational corporations are moving to a place with a large customer base and that is nowhere else but China.

V ới the Chinese customers to the US tourism declining, Tiffany & Co decided to move one of the business unit’s most expensive jewelry her to Beijing and Shanghai in the second quarter / 2019.

This will be the place to sell high quality products in limited quantities. And yet, this renowned jewelry group also upgraded three major stores in China, including in Hong Kong.

Ford Motor Co. estimates that China will become the largest market for its Lincolns line in the next few years. Therefore, the group plans to build a factory and set up a distribution system in mainland China to sell goods, without paying tax as at present.

Meanwhile, Tesla Inc is focusing on putting the factory in Shanghai into operation later this year. Depending on the completion time, the carmaker could avoid the latest tariff barrier that China intends to apply to U.S.-based vehicle products in December 2019.

Responding to China’s decision to tax US $ 75 billion of US imports, US President Donald Trump asked US companies to “immediately seek alternatives to China”.

However, the reality shows that, although the mainland economy is growing slowly, this is still a large market, with the potential for positive growth for many businesses around the globe, especially when the market is down. at home saturated. This is the reason why China is a place invested by many enterprises in the long term.

For example, with Starbucks Corp, China is the most important market for this coffee and beverage retailer, as the middle class here grows rapidly and tastes change. In the US, the growth space for Starbucks has become very limited, so in China, the company is opening a new store every 15 hours in the race to expand market share to compete with other other competitors.

Notably, China is also the largest market for aircraft manufacturers and this is why Boeing Co opened its first factory here late last year, despite the U.S.-China trade war. explosive. The plant is affiliated with a state-owned Chinese aircraft manufacturer and Boeing’s rare manufacturing facility outside the United States.

In the context of increasing US-China trade tensions, it is praiseworthy for US businesses that mainland consumers still favor the foreign products, especially American goods, from high-consumption consumer products. up to the average.

In the past week, the first shopping center of Costco Wholesale Corp in China had to suspend its operation on the first day of opening due to an unexpected number of customers, while shoppers scrambled for discounted products. and wait in line for hours to pay. Red Lobster, a seafood restaurant chain that currently has two establishments in China, is also waiting for a bright future in this world’s second largest economy.

“China will become our largest international market, with high margins,” said Red Lobster CEO Kim Lopdrup.

The US-China trade war has had a profound impact on the activities of Vietnamese businesses. Even the benefiting industries such as textiles and seafood face new challenges in the movement of orders and capital flows.

Answering the questions of the Securities Investment Review reporter that the demand for Grade A rooms in Ho Chi Minh City has increased from the tenants of foreign enterprises entering Vietnam following the wave of investment shift from China. entering Vietnam under the influence of the US-China trade war, Savills Vietnam representative said that the increase in demand from this group of customers has not been recorded.

This is partly due to the fact that the manufacturing group often looks for industrial park land to open a factory and set up an office right at the factory, partly because of the inflow of investment capital, but there are also orders being translated. move out of Vietnam.

Specifically, a Spanish company in the field of textile and apparel has reduced the proportion of orders in Vietnam from 32% to 20% to redirect to China. The reason is that businesses outside the US are benefiting when Chinese apparel manufacturers sharply lower prices to order to offset the decline of the US market.

Sales are global, so big fashion brands don’t necessarily pull out orders in China like American fashion brands. Thus, while some manufacturers in Vietnam receive more orders from Adidas (USA), there are also manufacturers reducing orders from brands outside the US.

Mr. Tran Nhu Tung, Member of the Board of Directors of Thanh Cong Textile Garment Investment and Trading Joint Stock Company (TCM) shared that the decline in demand in the Chinese textile and apparel industry has led to a decrease in yarn prices, reducing the profit margin of yarn products. exported to this country.

For TCM, fiber exported to China accounts for a small proportion of total revenue but also affects a significant proportion of profit margin.

Although TCM has restructured its products, reduced exports, increased internal use and shifted to higher value-added yarns, this has also made TCM faster to move all of its products. again. Not to mention, when the demand for export garment industry in the country increases, the price of labor also increases.

“But, in general, the US-China trade war has a positive impact on TCM,” Tung said.

Meanwhile, looking at the overall market of offices for rent, CBRE said, the demand for new office space increased by 21 percentage points over the same period and nearly 40% of new leasing requests were from manufacturing companies. and logistics.

Fisheries are often listed first in the list of industries benefiting from the battle between the two largest economies globally. However, a major player in this sector said that the export volume was not much, businesses had to face obstacles from enterprises in the US, causing exporters to pay a lot of costs for lawyers, explanations, making figures …

In addition, after the US postponed tariffs until December, Chinese manufacturers boosted exports to the US, pushing up shipping rates. Exporting seafood enterprises bear the increased costs when exporting refrigerated goods because the firms are prioritizing the transport of dry goods.

Report on business results of the first 6 months of many seafood enterprises showed no profit growth like MPC, VHC, ANV … Increasing revenue into the US market is not easy when the importers themselves listen to US policy on China.

On the other hand, even when growing seafood exports to the US, businesses also have to worry about hedging, ie investing marketing costs to diversify the market to avoid dependence on the US, leading to market risks. The school is volatile. Operating costs of businesses therefore increased over the same period.

Meanwhile, for steel enterprises, which are facing difficulties in trade barriers in the US market and the oversupply situation in the country, Mr. Le Thanh Nghia, Chairman of the Board of Directors of Dai Thien Loc Company said that the export market was difficult and the domestic market was more difficult because Chinese and Taiwanese enterprises investing in Vietnam could not export, so they were sold domestically, causing the market share to be broken up. Many manufacturers sell below cost.

“Many other manufacturing industries suffer from the same situation, such as packaging paper. Previously, we bought 12,600 dong / kg, now reduced to only 8,600 dong / kg due to reduced demand, causing manufacturers to return to compete in the country, ”Mr. Nghia shared.

According to Mr. Nghia, the downward trend due to declining demand from the impact of US-China trade war spread globally, making steel sheet enterprises in Vietnam certainly still face many difficulties.