456 Percent of Punitive Tariffs! Vietnam Issued an Urgent New Regulation to Crack Down on Transit Traders!
Recently, Vietnam's ministry of industry and trade issued criteria for "made in Vietnam" (origin), apparently to prevent some companies from using Vietnam to export to the United States.
What is "Made in Vietnam"? It is said that “Made in Vietnam” can be agricultural products and resources originating in Vietnam; products that are finally completed in Vietnam must include at least 30% of Vietnam's local added value according to international HS code standards. To put it simply, 100% of overseas imported raw materials must be added 30% in Vietnam to be exported in Vietnam.
For example, in the hanoitimes, Khaisilk, a local silk brand in Vietnam, labels Chinese silk scarves as Made in Vietnam and exports them overseas. Asanzo, a TV company, will import components from China, assemble them in Vietnam and export them in the country of origin Made in Vietnam. These two companies violate Vietnam's law of origin.
It is reported that Vietnam is to do such a thing may be pressure by the United States.
According to relevant data, China's exports to the United States fell 13.9 percent in the first three months of 2019, while Vietnam's surged 40.2 percent in the same period. If Vietnam's exports to the United States grow at this rate throughout this year, Vietnam will overtake Italy, France, the United Kingdom and India to become one of the largest sources of imports to the United States. It can be seen that Vietnam gains a lot from the trade friction between China and the United States.
In such a short period of time, it is possible to achieve such an increase. The reason is obvious. It is estimated that there are many Chinese goods disguised as Vietnamese products sent to the United States.
In this way, the United States must be unhappy.
In May of this year, the US Treasury Department listed Vietnam as a watch list for “currency manipulators”, but this still does not seem to make the US’s anger dissipate. On July 2, local time, the US Department of Commerce said that it is against Vietnam. Some steel products impose punitive tariffs of up to 456%.
Vietnam's exports to the us are expected to continue to surge in the second half of 2019 as the trade war between the us and China continues to fray. At the same time, Vietnam will be more strict in its management of Made in Vietnam, which also reminds the majority of Chinese foreign trade enterprises to pay attention! If you want to legally using Vietnam to export , you must abide by the new Vietnam origin policy!
Require 30% new added value!
According to the Vietnam News Agency, due to the depreciation of RMB in recent days, Vietnam’s exports to China continue to face multiple difficulties and challenges.
According to the analysis of BVS company, the exchange rate of the Vietnamese Dong against the US dollar at the end of July is equivalent to the level at the end of last year. Therefore, the National Bank of Vietnam has the space for adjusting the exchange rate in the case of changes in the RMB exchange rate. Although it may be under pressure from the depreciation of the RMB, the National Bank will take practical measures to avoid excessive devaluation of the VND exchange rate (over 3%) to avoid risks.
Despite this, on the export side, the continued sharp depreciation of the RMB exchange rate has still hindered the export of Vietnamese companies to China.
Vietnamese financial scientist Ding Shixian believes that Vietnam’s exports to China, especially agricultural products, have been experiencing difficulties recently because the Chinese government has issued new regulations on imports, placing higher demands on the quality, traceability and management of imported products. In addition, the depreciation of the RMB exchange rate has also brought many adverse effects to Vietnamese exporters, as the price of Vietnamese products in the Chinese market has become more expensive than domestic products in China. This situation has caused some export enterprises in Vietnam to be under pressure from operational efficiency and export competitiveness.
Conversely, the depreciation of the RMB exchange rate will bring favorable conditions to Vietnam’s enterprises that import Chinese goods. However, this situation may also create a new wave of imports of cheap Chinese products, making Vietnamese domestic products encounter the possibility of unfair competition.
The actual situation shows that Vietnam’s recent activities on China’s exports of goods, especially agricultural products, face multiple difficulties. Specifically, according to the Ministry of Industry and Trade Import and Export Bureau, China is expected to start the import food import and export business filing management system and the “Import and Export Pre-packaged Food Label Inspection Supervision and Management Measures” from October 1.
Deng Shilian, manager of Vietnam Longan Food Co., Ltd. believes that almost all companies currently exporting to China trade in US dollars. As a result, the sharp fall in the exchange rate of the renminbi against the US dollar has caused setbacks for Vietnamese companies that export goods to China.
The export of Vietnamese rice to China is facing many difficulties. It has been frozen since the end of 2018 due to the lower demand in China and the impact of China's import policy.
The Vietnamese aquaculture industry has also encountered a similar situation. The Vietnam Aquatic Products Processing and Export Association said that the fall in the exchange rate of the renminbi against the US dollar was the main reason for the increase in the price of Vietnamese shrimp exports to China, which in turn reduced the competitiveness of Vietnamese shrimp products.