Dong Nai proactively prepares scenarios to respond to US reciprocal taxes

Vietnam has just completed the second round of negotiations with the US on the issue of the US applying a 46% reciprocal tax on Vietnamese goods. The results of the negotiations open up many expectations that are beneficial to both sides. Dong Nai has developed a response scenario and made proposals to the Central Government to remove difficulties for industrial production enterprises in the province.

Many textile and garment enterprises will be affected by the US's reciprocal tax policy. Photo: N. Lien

In early April 2025, when US President Donald Trump announced the application of a 46% import tariff on Vietnamese goods, Dong Nai conducted a quick survey of a number of manufacturing enterprises in industrial parks (IPs) to promptly grasp and have a response plan.

Businesses affected even though tax policy has not taken effect yet

According to the Dong Nai Industrial Park Management Board, the US announced the imposition of a 46% tariff on Vietnam on April 4, 2025. Of the 137 surveyed enterprises, over 95% said they were affected by the announcement of the imposition of a 46% tariff from the US.

Some footwear and textile enterprises said that immediately after the US announced the imposition of tariffs, their orders were reduced by 20-50% according to the original plan. The reason for the early impact on orders in the above industries is that most enterprises in Dong Nai are subcontractors for partners whose main export market is the US. At the same time, the partners shortened the time of orders to deliver during the period when the US extended tariffs. Currently, enterprises are worried that if the negotiation results do not meet expectations, products manufactured in Vietnam will be subject to tariffs, causing product prices to increase, affecting the value of the contract.

For the fields of wooden furniture, production of electrical equipment - electronic components, components - auto parts, etc., orders have also decreased sharply. Many foreign-invested enterprises have even suspended their investment plans and expanded production scale to "wait" for the final decision on the TĐƯ.

Mr. Tran Van Hung, manager of a textile company and member of the Dong Nai Province Accounting Association, said that due to the impact of the US's TPP policy, his company's textile processing orders are down 20%. However, the damage to Mr. Hung's company is still lighter than that of enterprises in the leather footwear sector. According to Mr. Hung, some enterprises have been affected by a 50% reduction in orders according to the original plan. In addition to the desire for the US to cancel or change the tax rate to a lighter level than announced, enterprises also expect support, the unblocking of some tax-related policies, the promotion of negotiations on the implementation of trade agreements, support in finding and connecting to new markets, etc.

The US is currently Dong Nai's largest export market, accounting for over 32% of the province's total export turnover. If the US imposes a 46% tariff on Vietnamese goods, it will affect the decline in orders from Dong Nai enterprises with partners whose goods enter the US market, leading to a reduction in jobs, attracting investment, and negatively affecting Dong Nai's double-digit growth target in 2025 and the following years.

Proactive response scenario

To respond to the US's TĐƯ policy, Dong Nai has developed 3 detailed scenarios corresponding to 3 expected TĐƯ levels to provide comments and response plans.

Head of the Trade Management Department (Department of Industry and Trade) Le Giang Nam said that the scenarios for responding to the US's TĐƯ policy were consulted and proposed by the Trade Management Department based on the results of coordinated surveys and assessments of the situation from relevant departments, agencies and sectors. Accordingly, the response scenarios will put forward assumptions that the US will apply TĐƯ from 10% to 20-25% and 46%. Based on data from actual surveys, the results of Dong Nai's import-export activities to the US compared to other export markets; the impacts on investment attraction, employment, etc.

Based on the analysis and assessment of the impact on each hypothetical tax rate, Dong Nai has proposed response scenarios for each predicted tax rate of the Department of Industry and Trade.

In addition to the solutions, the Department of Industry and Trade also has some advice and proposals for provincial and central leaders such as: recommending the Ministry of Industry and Trade to continue protecting Vietnam's trade interests in the next rounds of negotiations; supporting training for businesses on skills to access the US market. For the Ministry of Finance , it is proposed to consider the mechanism of extending, postponing, and exempting import taxes on components and raw materials for key export industries. Associations, unions, and business federations proactively share data, promptly reflect difficulties, and connect members to develop appropriate response plans. For businesses, it is necessary to upgrade technology, optimize costs, develop plans to approach new customers, promote digital transformation and e-commerce.

At the meeting and dialogue with import-export enterprises in April 2025, Vice Chairman of the Provincial People's Committee Duong Minh Dung commented that the US's imposition of a 46% tax on Vietnamese goods will have a negative impact on exports and trade in services in Dong Nai, especially in the textile, footwear, wood, electronics and agricultural industries. The Vice Chairman of the Provincial People's Committee said that the provincial leaders always care about, accompany and support enterprises in finding new markets, organizing trade promotion activities, supporting enterprises in seeking to diversify export markets, not focusing entirely on the US market, but expanding new alternative markets such as: Europe, Japan, ASEAN, Middle East, Latin America... The province will have timely recommendations on tax, financial and incentive policies; support enterprises in increasing the added value of goods...

The Vice Chairman of the Provincial People's Committee also requested that enterprises pay attention to investing and converting to modern, environmentally friendly production technology to improve product quality, meet diverse market needs for sustainable development.

Ngoc Lien

Source: https://baodongnai.com.vn/kinh-te/202505/dong-nai-chu-dong-cac-kich-ban-ung-pho-thue-doi-ung-cua-my-8e802a0/