20% Counterpart Tax: Businesses Seek to Adapt

The US reciprocal tax rate on Vietnamese goods has decreased from 46% to 20%, which has somewhat reduced the tension of many industry associations and Vietnamese businesses.

According to the latest decree from US President Donald Trump, the reciprocal tax rate on Vietnamese goods has been reduced from 46% to 20%. This is a direct result of the long negotiations between the Government and ministries and sectors since the end of April 2025.

The efforts and results of the negotiations received positive reviews from experts, representatives of many industry associations and businesses. The issue is that Vietnamese businesses need to have a strategy and a proactive mindset to firmly overcome all challenges and seize opportunities in the new context.

According to economic experts, the 20% reciprocal tax rate has somewhat reduced the tension of exporters. Before President Donald Trump's decree on adjusting the reciprocal tax rate, according to which the US reciprocal tax rate on Vietnamese goods was reduced from 46% to 20%, a representative of the Textile, Garment and Footwear Association had an initial assessment.

A representative of the Vietnam Textile and Apparel Association (VITAS) said that the 20% tax rate is the general tax rate applied to Vietnamese goods. However, the textile and garment industry has many diverse products, from yarn, fabric to finished clothing. VITAS needs to wait to consider the specific tax rates applied to each type of product, each HS code, to be able to make an accurate assessment of the real impact on the export activities of each enterprise.

Regarding the 20% tax rate for Vietnamese goods, higher than the 19% tax rate of some countries in the Southeast Asian region such as Thailand, Cambodia, Indonesia, Malaysia, the Philippines, etc., some textile and garment enterprises said that this is a "relatively appropriate" tax rate in the context that Vietnam is the leading Southeast Asian country in exporting to the US and has the fourth largest trade deficit with the US.

Previously, as soon as there was initial information about the US tax policy, Mr. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association, said that in response to the fluctuations, the textile and garment business community remained calm, not panicked but proactively sought solutions to overcome difficulties.

Many businesses have made breakthroughs in working methods and policies for coordinating and sharing internal orders; and have promoted the expansion of consumer markets to minimize risks from policy fluctuations of major trading partners.

Producing clothes for export to the US market at TAL Vinh Phuc Garment Company. (Photo: Tran Viet/ VNA)

Sharing the same view on the strategy of "not putting all your eggs in one basket"; instead of focusing only on traditional markets such as Europe, the US, and Japan, Ms. Phan Thi Thanh Xuan, Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association, shared that, in addition to consolidating market share in traditional markets such as Europe, the US, and Japan, the association has guided and supported businesses in the industry to expand exports to a number of markets in the South American and Middle Eastern regions.

These are areas with large and diverse consumption potential, helping businesses minimize risks when traditional markets fluctuate. In addition, businesses are also initially approaching large e-commerce sites such as Alibaba, Amazon... to expand online consumption channels, directly reaching global consumers.

Despite the adjustments, reality shows that not only the US market, but also other major markets such as the European Union (EU) are increasingly placing strict requirements on sustainable development, origin, and environmental and social standards. This creates a "double" pressure forcing Vietnamese businesses to constantly innovate and adapt.

A large enterprise producing and exporting wooden furniture in Binh Duong (formerly) commented that with the US's reciprocal tax rate for Vietnam of 20%, Vietnamese wooden furniture exports are not in a completely favorable position, but are not at a disadvantage either.

The tax difference between Vietnam and some other competitors is not significant. For example, ASEAN countries such as Indonesia and Cambodia have tax rates 1% lower than Vietnam.

This difference does not have much practical significance in competition. The general level between countries is equivalent, so it can be said that the Vietnamese wood industry does not face too much risk from this new tax policy.

With large markets such as Japan, Korea or Europe - which are only subject to taxes at a rate of about 15%, although there is a difference compared to Vietnam, these are countries that do not create competitive pressure on the Vietnamese wood industry.

Regarding the US's reciprocal tax with other countries, up to this point, the Vietnamese wood industry is still confident that it has enough capacity to compete, as it has done in the past. "Basically, the tax level currently applied is similar between competitors and affects both manufacturers and consumers. All have to pay a certain tax rate and US consumers will also bear part of that cost. Although there may be certain difficulties in the initial stage because it will be necessary to find a way to reconcile that tax rate between suppliers, importers and consumers. But in the long run, the market will self-adjust according to the law of supply and demand. All three parties will share the cost pressure and the system will reach a new equilibrium," this business analyzed.

Mr. Nguyen Hoang Phuoc, Director of Nam Viet Furniture Production and Trading Joint Stock Company, a wooden and interior furniture exporter, shared that the US market currently accounts for over 50% of Vietnam's total wood export turnover. When the new tax rate is in place, the shopping demand of Americans will also be affected, because the price of the final product will increase.

According to Mr. Phuoc, Nam Viet Company currently has a need and is researching exporting wooden furniture to the United States, but in the context of the newly announced tariff policy, the business is still quite cautious and is only exploring the market, researching local customers to build a long-term export cooperation strategy.

Therefore, businesses still expect that the two sides will continue to negotiate to further reduce tariffs in the coming time, creating favorable conditions for both Vietnamese manufacturers and American consumers./.

Source: https://htv.com.vn/thue-doi-ung-20-doanh-nghiep-tim-cach-thich-ung-222250804181102302.htm