Businesses must prepare resources against the risk of being sued for trade defense in the US market.

Exporting goods to the US market, businesses must prepare the necessary resources before trade defense lawsuits.

The risk of being sued for trade defense in the US market for Vietnamese export goods is always present. Therefore, it is very important to be mentally prepared and have resources ready to respond. Mr. Do Ngoc Hung - Commercial Counselor, Head of the Vietnam Trade Office in the US - shared about this issue with Cong Thuong Newspaper.

It is very important to be mentally prepared and have resources ready to respond to trade defense investigations in the US market. Photo: VNA

Recently, there have been many trade defense investigations, especially investigations against evasion of trade defense measures from the US market against Vietnamese export goods. Could you please tell us more about this issue, as well as the impact of the lawsuits on Vietnamese enterprises?

The United States is currently Vietnam's largest export market. According to statistics from the International Trade Commission, US Department of Commerce, in the first 9 months of 2024, the total two-way trade turnover between Vietnam and the United States was about 94 million USD, of which Vietnam's exports were 88 billion USD and imports were about 8 billion USD. Accordingly, the Vietnam-US trade surplus is very large. This is the reason why the US manufacturing industry always pursues trade defense lawsuits against Vietnam's export goods. In addition, Vietnam is not yet recognized by the US as a market economy , so industry associations and US manufacturers always consider Vietnam as a subject in trade defense lawsuits.

In addition, the United States has recently issued new regulations on trade defense investigations (especially subsidies) to facilitate the investigation process, which means that the burden of proof will be greater for exporting enterprises and the government of the exporting country. It is worth noting that the subsidy programs have expanded in content and scope, so that the policies of the Government of which FDI enterprises are nationals will also be considered in subsidy investigations.

In addition, in the context of the recent US election, the support and power between the two candidates are very close, and the government's policies are all directed towards the US in the hope of gaining more votes from the battleground states. Accordingly, some unions representing US workers have voiced their support for the government. And of course, businesses in that industry want their support to be worthy and rewarded through protective and technical protection measures.

Mr. Do Ngoc Hung - Commercial Counselor, Head of the Vietnam Trade Office in the United States. Photo: VNA

The biggest loss when the US increases trade defense investigations is that Vietnamese businesses will spend more time and resources to participate in and pursue the lawsuit. On the other hand, the tax rate on exported goods may increase when the scope and content of subsidy programs are expanded.

At the same time, any industry with large or small export turnover can be sued. The risk leads to import businesses tending to "take precautions", redirecting imports from other partners. And finally, other countries can also consider filing a lawsuit if the lawsuit in the United States on that item is successful, bringing benefits to domestic production of US businesses.

Compared to many markets, the US trade defense regulations are considered to be the strictest and most stringent. In your opinion, how difficult is this for Vietnamese businesses?

The US trade defense regulations can be considered a model and a general guideline for other countries to learn from and apply. Currently, the US trade defense system is managed by two relevant agencies: the US Department of Commerce (investigating tariffs, tax rates and tax imposition) and the US International Trade Commission (investigating damage to domestic production). Therefore, Vietnamese enterprises must invest resources to respond to investigations at both agencies to increase their chances of winning the lawsuit.

For the US Department of Commerce, it often provides a lot of content and information by sending questionnaires with a limited response time (although it can be extended but not much); they can send it many times if they find it incomplete. If a Vietnamese enterprise provides insufficient/incorrect/incomplete cooperation, the available data (usually disadvantageous) will be used immediately to calculate the tax rate. In addition, this agency also requires detailed information about the accompanying certificates and must submit them to the agency's own system. If Vietnamese enterprises do not research carefully or lack experience, it is very easy to submit insufficient certificates, leading to not being considered for the appropriate tax rate.

Since the United States is Vietnam’s largest export market, some Vietnamese businesses are relatively familiar with the cases due to experience from previous cases and proactively handle them. However, for businesses exporting to the United States for the first time, when they get involved in lawsuits, it will be very difficult without the support of a consulting lawyer who is knowledgeable about US law. However, hiring a US lawyer is not cheap.

Up to now, in cases, Vietnamese enterprises often face risks if trade defense measures are applied. However, the US often investigates groups of countries, if enterprises proactively respond well, the applied tax rate will be lower than other countries.

So, can the Vietnam Trade Office in the United States make recommendations to businesses to effectively prevent and combat trade defense measures from this market?

When exporting to the United States, businesses must always be prepared for the possibility of being sued for trade defense at any time, because US businesses make very effective use of this tool. Currently, the United States is the country that files the most trade defense lawsuits in the world and in the World Trade Organization (WTO) based on requests from US businesses and in some cases initiated by US trade agencies.

Therefore, to respond to lawsuits from the market, businesses need to strengthen their relationship with the United States to proactively grasp information early and from afar. Thereby, providing information to relevant agencies in the process of lobbying for explanations in investigations. In addition, businesses need to carefully study the US trade defense tools, as well as the processes and procedures to have legal knowledge on this issue.

In addition, businesses must always prepare the necessary and appropriate resources to handle incidents when they occur, such as storing records and documents on input materials for export. In particular, it is necessary to study and consider limiting the use of raw materials from markets that the United States is "watching" and considering as subject to trade defense measures. If an incident occurs, it is necessary to fully cooperate with relevant US agencies, including US investigation teams coming to Vietnam to conduct on-site investigations.

With the goal of "prevention" rather than "control", how will the Vietnam Trade Office in the United States implement programs to support businesses in trade defense lawsuits in the United States in the coming time, sir?

Although the United States has not yet recognized Vietnam's market economy, through recent reviews, we have received very good support from US partners for businesses based on assessments of quality and price criteria of goods. This is a very positive signal, accordingly, Vietnamese authorities will persistently pursue this issue.

From the market perspective, the Vietnam Trade Office in the United States is committed to supporting the protection of the legitimate rights and interests of exporting enterprises; actively supporting within the scope of its functions and tasks so that enterprises can achieve the best results in lawsuits. In particular, the Trade Office will continue to monitor import-export data, collect information from many related parties to be able to give early warnings of possible lawsuits. In particular, it will strengthen relations with experienced law firms in the market to support enterprises in trade defense cases.

In addition, the Trade Office will continue to utilize information channels to exchange and work with partners and relevant agencies of the United States, increase consultation with the US Department of Commerce; persistently express views and arguments based on the direction of the Ministry of Industry and Trade and relevant ministries. In addition, the Trade Office will also report to the Ambassador and coordinate with relevant units of the Vietnamese Embassy in the United States to continue to advocate and exchange technical channels at different levels to support the handling of cases raised by US authorities.

Thank you!

Source: https://congthuong.vn/doanh-nghiep-phai-san-sang-nguon-luc-truoc-nguy-co-bi-kien-phong-ve-thuong-mai-tai-thi-truong-hoa-ky-357786.html