Dong Nai proposes the Central Government to remove difficulties for businesses affected by reciprocal taxes from the United States

The proposals of the Provincial People's Committee are based on the results of a survey of the actual situation of local manufacturing and exporting enterprises and the opinions of associations after the United States announced a decree imposing reciprocal taxes on countries with large trade deficits in goods with the United States.

Dong Nai 's wood industry directly exports from Dong Nai. Photo: Ngoc Lien

Big "shock" for export businesses

According to the assessment of the Provincial People's Committee, the US applying a 46% tax rate on imported goods from Vietnam is a big shock to businesses exporting to this market.

For Dong Nai, the United States is the largest export market with an export turnover of over 7.65 billion USD in 2024, accounting for 32% of the province's total export turnover. The main export items to the United States are footwear; wood and wood products; machinery, equipment, spare parts; textiles and garments. Meanwhile, the import turnover of goods from the United States in 2024 reached over 0.95 billion USD. Dong Nai currently has a trade surplus with the United States of nearly 6.7 billion USD.

Cargill Group (USA) manufacturing plant in Dong Nai.

Although the US has not yet applied a 46% reciprocal tax, some items that have long been exempted from tax are now subject to a 10% tax, such as the wood industry, one of the province's key export industries and directly exported by local businesses, which are already facing many difficulties and are now facing even more difficulties due to the US tax policy.

Other areas such as investment attraction, production and business... are also affected. A preliminary survey conducted right after the US reciprocal tax order was announced (early April 2025) by the Provincial Industrial Park Management Board showed that 95% of 137 surveyed enterprises said that the reciprocal tax from the US caused widespread negative impacts, the main impacts include: reduced orders, increased costs, risk of production reduction, impact on employment, and reduced investment attraction in Dong Nai province.

The Provincial People's Committee proposed that the Ministry of Industry and Trade consider and comment on the proposal of the Dong Nai Wood and Handicraft Association to reduce the tax rate on sawn timber from 25% to 0% when imported from other markets.

According to Dong Nai Import-Export Association, handicraft, household goods, logistics... manufacturing enterprises are suffering many negative impacts from US tariff fluctuations. The reason is that previously, products exported to the US enjoyed a preferential tax rate of 0%...

What solutions are recommended?

Dong Nai has proactively reviewed, analyzed, and proposed a number of issues to remove difficulties for businesses in the province.

In particular, Dong Nai hopes that the Government will continue to promote negotiations with the United States to seek solutions to minimize negative impacts on the Vietnamese business community and ensure Vietnam's legitimate interests in bilateral trade relations.

In addition, the Government is requested to review and direct relevant ministries and sectors to promptly implement the contents that Vietnam has committed to the United States to achieve a delay in imposing tariffs. At the same time, review and take effective measures to handle issues that the United States considers to be trade barriers, technical barriers, etc.

Ceramics is one of Dong Nai's direct export products to the US market. Photo: Ngoc Lien

Regarding tax policies, the Provincial People's Committee recommends that the Government continue to consider and issue tax support measures for businesses, including reducing land rent, extending tax payment deadlines, reducing tax rates for businesses in general and especially businesses in industries that are heavily affected by the US's reciprocal tax imposition...

Propose that the Ministry of Industry and Trade increase trade promotion and expand export markets to other potential regions outside the United States such as the EU, Japan, Korea, ASEAN... Soon issue specific incentive policies to encourage businesses to invest in research and development of new markets.

Dong Nai currently has 220,000 workers working in the footwear industry, which is the province’s largest export industry. Most of the footwear manufacturing companies are foreign-invested. Many businesses have had to reduce production due to reduced orders.

In addition, the Ministry of Industry and Trade needs to continue directing the Departments of Domestic Market Management and Development; Trade Promotion and related units to strengthen the inspection and strict supervision of the origin of goods, in order to effectively prevent trade fraud and counterfeiting of origin. Build a professional information system, coordinate with localities in implementing regional and area-level trade promotion activities, and strongly promote international e-commerce activities.

The Provincial People's Committee also said that the Ministry of Industry and Trade needs to advise the Government to supplement and complete the Decree on industrial promotion policies, especially the contents of supporting small and medium enterprises in developing science and technology, innovation and digital transformation.

According to information from the Government, Vietnam and the United States have just concluded the second round of negotiations on the bilateral agreement on reciprocal trade between the two countries, which took place in the United States. The Vietnamese and US negotiating delegations discussed all the contents raised before the negotiation session in the spirit of goodwill, frankness, respect for institutions, harmony and balance of interests as well as in accordance with international commitments and the development level of each country. Thereby, identifying groups of issues that have reached consensus or have similar views, groups of issues that need to continue to be discussed to reach consensus in the coming time. The next round of negotiations is expected to take place in early June 2025.

Ngoc Lien

Source: https://baodongnai.com.vn/kinh-te/202505/dong-nai-kien-nghi-trung-uong-go-kho-cho-doanh-nghiep-truoc-anh-huong-cua-thue-doi-ung-tu-hoa-ky-4e40b44/