How to proactively adapt to trade remedy for higher exports to US

Do Ngoc Hung, trade counselor and head of the Vietnam Trade Office in the United States said that according to data from the US International Trade Commission (USITC), by the end of May 2024, the two-way trade turnover between Vietnam and the US reached US$54.8 billion, up 15% over the same period from last year. This was a positive growth rate when most countries directly competing with Vietnam had low growth rates or below 0%.

Meanwhile, the General Department of Vietnam Customs reported that in the first half of the year, Vietnam's exports to the US fetched US$ 55.1 billion, up 24% on-year, accounting for 30% of the Southeast Asian nation’s total export turnover.

The trade surplus hit US$48 billion, contributing to Vietnam's total trade surplus of US$12 billion throughput the reviewed period.

The US will remain Vietnam's largest export market in the second half of the year, with the expectation that this will be the third consecutive year that the total export turnover between the two countries reaches more than US$100 billion and exceeds the target set at the beginning of the year.

Analyzing the trade growth momentum between both countries in recent times, Do Ngoc Hung said that, first of all, the relationship between the two countries has been increasingly grown. In 2013, the two countries established a comprehensive partnership, and they officially upgraded their relations to a comprehensive strategic partnership in 2023.

Besides, Vietnamese goods are increasingly popular in the US market thanks to their continuously improved quality, updated trends and competitive prices.

On the other hand, changes in the supply chain as well as the wave of investment shifts have contributed to enhancing the production capacity of Vietnamese enterprise. This also creates opportunities and room for Vietnamese goods to increase exports to the world in general and the US market in particular, Hung added.

However, the head of the Vietnam Trade Office in the US stated that along with the development of trade turnover, Vietnam's export goods to this highly lucrative market are currently facing numerous barriers, typically trade defence measures through anti-dumping and anti-subsidy investigations and evasion of trade defence tax measures as well as goods transfer.

As of June 2024, the US initiated the most trade defense investigations into Vietnamese exports, with 11 cases.  The reason is that increasing imports means that domestic competitive pressure on US manufacturing industries is increasingly fierce. In that context, US businesses will increase the use of this tool to limit imports and reduce competitive pressure, Hung analyzed.

The export industries that the US has sued for trade defence have turnover ranging from low to high-value items with large market shares and turnover, such as steel products, seafood (shrimp, pangasius), machinery and equipment, wood, furniture, paper bags, plastic bags, aluminum and recently, paper plates.

Therefore, Hung noted that Vietnamese export enterprises need to determine that the risk of being sued for trade defence will always exist along with increased exports and need to be proactive in their response plans.

“The lawsuits will continue to increase in the coming time when the US and world economies are in crisis, the US’ production industry is facing plenty  of difficulties and especially amid the US government needing the support of voters in the upcoming US presidential election. The Ministry of Industry and Trade has directed the US Department of Commerce (DOC)'s preliminary conclusion on anti-dumping tax on raw honey from Vietnam”, Hung said.

He also recommended that businesses should carefully study legal regulations and procedures for US trade defence investigations, and prepare information and documents in case of an incident.

In case of an incident, businesses should actively coordinate with Vietnamese authorities, such as  the Trade Remedies Authority of Vietnam (TRAV) under the Ministry of Industry and Trade (MoIT) the investigation agency of the US Department of Commerce  in a bid to provide complete information as requested.

Currently, the general trend is that major markets, including the US, continue to apply trade barriers in terms of technology, hygiene, safety, the environment, social responsibility, etc. to protect domestic production and consumers, thus increasing compliance costs for exporters.

Meanwhile, for a developing and populous country like Vietnam, the above key export industries play an important role in socio-economic development, bringing export surplus to the economy, labor mobility, and economic restructuring.

Therefore, the head of the Vietnam Trade Office in the US committed and affirmed that the Trade Remedies Authority of Vietnam ) under the Ministry of Industry and Trade , and the Trade Office will continue to support and guide businesses to effectively respond to trade defence investigations by the DOC.

Additionally, Vietnamese competent agencies will coordinate and cooperate with the investigation agency in providing information, receiving the inspection team at enterprises and fully engaging in the steps prescribed by US law, especially in the context of the DOC expanding its authority as well as supplementing regulations on anti-dumping and anti-subsidy investigations (regulations on cross-border subsidies, taking into account factors such as the environment, labor, and intellectual property).