Vietnamese businesses worry about cheap goods before Trump's tax policy

Although US President Donald Trump has allowed the continuation of the tax exemption and customs inspection policy for orders under $800, Vietnamese businesses are still worried about a wave of cheap imported goods in the coming time.

Workers work in an essential oil factory of a Vietnamese enterprise - Photo: JULYHOUSE

Shipping companies carefully check the origin of products.

According to an executive order issued by US President Donald Trump on February 7, the US will temporarily allow small, low-value packages from China to be exempt from tariffs until the US Department of Commerce can confirm that procedures and systems have been established to clear these packages and collect taxes.

At nearly 10:00 a.m. on February 8, HP Global Freight Forwarding Joint Stock Company (HPW) notified customers about the inspection of goods related to Chinese origin.

In fact, regulations on import tax from the US such as adding 10% tax and temporarily suspending tax on goods under 800 USD will greatly affect the time and customs clearance process of e-commerce goods entering this country.

According to HPW, “Made in China” orders, if sent from a country other than China to the US via e-commerce, will be fined $5,000 per order. At the same time, the tax rate will also be applied similarly to goods sent directly from China.

To control and not affect the amount of goods going from Vietnam, this freight forwarding company will carry out activities such as checking the probability of goods, checking labels, and origin of products.

At the same time, the company will ensure that the goods do not have a Chinese origin or are "Made in China" and will return products with Chinese labels.

If the product is found to have Chinese labels or characters, HPW will return the entire item.

This is to avoid the risk of violating US government regulations, ensuring that goods from Vietnam are not subject to taxes like Chinese goods.

Can't compete with mass production

Southeast Asia in general and Vietnam in particular are predicted to remain the region suffering from the "total dump" of products of diverse types and prices from the world 's manufacturing factories.

Along with that, the trend of cooperation through joint ventures and mergers & acquisitions (M&A) between Chinese and Vietnamese enterprises will increase.

In recent years, goods from China have flooded the Vietnamese market at an increasingly strong rate, especially through e-commerce platforms such as Temu , Shein, 1688, Alibaba, Shopee and TikTok Shop.

This has posed a big challenge for domestic businesses, which have been struggling with costs, branding and consumer psychology favoring cheap goods.

Speaking to Tuoi Tre Online, Mr. Dao The Vinh - founder of the Midori fashion brand - said that in 2024, many sellers and startups had to sell off their products and deeply discount them to 99,000 VND for products such as T-shirts, accepting losses to compete with China.

As a result, they ran out of capital and were unable to pay their debts to small factories, leading to the bankruptcy of entire clusters of businesses including sellers and manufacturers. According to Mr. Vinh, this clearly shows the impact of not being able to compete on price with China, especially for mass-market products such as T-shirts.

T-shirts from abroad are sold through platforms in Vietnam at a price of about 87,000 VND, while the same product from Midori is 149,000 VND - Screenshot

According to Mr. Tran Lam - founder of Julyhouse brand, Vietnamese enterprises, especially domestic brands, are facing fierce competitive pressure. One of the biggest difficulties is price. Products such as cosmetics, essential oils, and household appliances imported from China have low prices thanks to their huge production scale and cost optimization.

For example, a bottle of natural essential oil imported from China costs only 30,000 - 50,000 VND, while a similar product from a Vietnamese brand costs 60,000 - 80,000 VND due to the difference in production, inspection and operating costs.

Not only are Vietnamese businesses under pressure from prices, they are also facing difficulties due to consumer psychology being increasingly influenced by cheaper options.

"Vietnamese consumers have a habit of comparing prices, making it difficult for domestic brands like Julyhouse to convince customers to choose quality products over cheap ones," Mr. Lam shared.

Factors driving the trend of Chinese goods flooding markets

According to Mr. Tran Lam, the strong development of cross-border e-commerce helps Chinese goods easily reach Southeast Asian consumers directly without going through traditional import channels.

In addition, manufacturing costs in China remain competitive thanks to its large-scale supply chain and highly automated production systems.

Despite having to pay import taxes, their product prices are still lower than those produced in Southeast Asian countries, including Vietnam.

Not only does China have advantages in production, it also invests heavily in cross-border logistics systems and has large warehouses located close to the Vietnamese border, such as in Lang Son and Quang Ninh.

"From 2024, small sellers will almost no longer exist on e-commerce platforms. Meanwhile, large factories with enough capacity will switch to self-production and self-business. The direct-to-consumer model will become more and more evident from 2025," said Mr. Dao The Vinh.

Tuoitre.vn

Source: https://tuoitre.vn/doanh-nghiep-viet-lo-hang-gia-re-truoc-chinh-sach-thue-cua-ong-trump-20250208181249657.htm