What should Vietnamese Enterprises do during the US-China trade war?

The unintended impact of the US-China trade war on the world economy.

In the election campaign, US President Donald Trump affirmed “America first and only America first”. He repeatedly announced that production and jobs would return to the United States, while addressing a serious trade deficit between the United States and China. Earlier, trade relations between the United States and China have grown rapidly since the establishment of diplomatic relations and the signing of the Bilateral Trade Agreement in 1979. The two countries are huge trade and investment partners of each other. However the US-China trade deficit is not simply the number that is increasing over time.

The US-China trade war officially started on April 2, 2018 after President Donald Trump signed the decree paving the way for a US$ 60 billion tax on imports from China.

In 2017, the US President repeatedly requested inquiries to determine whether or not the steel produced by China and other countries threatened US national security and requested  investigation whether China had violated intellectual property rights towards US companies. As being estimated by US, the damage can be up to 225 - 600 billion US dollars per year.

The US-China trade war officially started on April 2, 2018 after President Donald Trump announced that the government would impose a 25% tax on steel and 10% on imported aluminum. He also signed a decree paving the way for a US$ 60 billion tax on imported products from China and restricting Chinese businesses' investments, as well as acquisition activities in the United States.

In response, China's Ministry of Commerce announced on April 1 that this country would impose tariffs on 128 US products. On April 15, the US Department of Commerce continues to ban US companies from selling software and high-tech components to ZTE. On Sept. 13, Trumps announced that US  would impose additional duties on an additional $ 200 billion in Chinese goods exported to the United States, in which the 10% tariff has been applied since 24/9 and will be increased to 25% early next year. Trumps also announced that additional duties would be imposed on all Chinese goods  exported into the United States (over US$ 500 billion).

The bilateral trade war between the great powers, in the context of globalization today, certainly has a lot of impacts on other economies. Each side is trying to pull on the "allies" or countries under its control. According to Oxford Economics, world trade will fall by 4% and global GDP growth will fall by 0.4%. At the G-20 meeting of the Governors of the Bank and Finance Ministers, the IMF General Director affirmed that the US-China trade war had a negative impact on the world economy. Economists have warned that for every 100 billion US dollars of goods being taxed, global trade will fall by 0.5 percent.

What should Vietnam do in the new economic situation?

Vietnam is a country integrating deeply in a highly interdependent global trading system. Vietnam has close trade relations with both US and China. A trade war between the two largest economies in the world is certainly not good for Vietnam.

Vietnamese companies can take advantage of expanding market share in the US in such sectors as footwear, garments, furniture.

However, it is realistic to see that in the event of  US-China trade war increased in full-scale, the opportunity will come to many other countries as the substitutes for these two markets. Thus, Vietnam also take itself a chance. In particular, US businesses will have difficulties doing business in China, they need to change direction and maybe Vietnam will be their target. Imports from China into the US will be decreased and Vietnamese products  can fully fill that blank.

Vietnamese companies can take advantage of expanding their market share in US  in footwear,garment, furniture, electronics, sports equipment, semiconductors, toys.

However, the opportunities are always accompanied by many challenges, especially in the context of Vietnamese enterprises which are mostly SMEs along with limited management experience and low competitiveness. Our enterprises need more strict management, avoid the phenomenon in which Chinese goods intermingled in Vietnam for transshipment or finding the way to export to the US, especially  steel, furniture products. Many Vietnamese businesses are still vague and they need to find a solutions, specific directions to minimize the negative impact of US-China trade war.

In this context, economics conference "Vietnamese Enterprises  and the integration path in the global economic space" is held on December 1, 2018 at the National Convention Center in Hanoi. The conference is organized with the hope that businesses will get the strategies that open the path for growth, find a way to develop, integrate successfully for enterprises, take advantage of opportunities, and avoid the negative effects of US - China trade war.

The conference is hosted by PTI in company  with PBS Business School, with the participation of leading economic experts such as Mr. Choi Bong Sik - President of World OKTA Organization - Hanoi Branch. Mr.Truong Dinh Tuyen - Former Minister of Commerce, Mr. Tran Dinh Thien - Former Director of Vietnam Institute of Economics, Mr. Do Cao Bao - Deputy General Director of FPT Group, Mrs. Vu Thi Thuan - Chairman of Traphaco Joint Stock Company, Mr. Nguyen Tat Thinh - Chairman of the Lecturing Board, PTI Education Training Group, Mr. Nguyen Hoang Phuong- Vice Chairman of the Lecturing Board, PTI Education Training Group This is also a chance for enterprises to have the opportunity to interact with economic experts and executives of leading enterprises in the world and in Vietnam.

Time and venue:

13h00, December 1st 2018

National Convention Center, Hanoi.

Pham Hung road, Me Tri, Nam Tu Liem, Hanoi.

For the attendance, please contact:

PTI Education Training Group

Premier Business School PBS

*Head office in Hanoi:

1st floor, 13, 14 – Song Da Building – Pham Hung Road – Nam Tu Liem – Ha Noi.

*Office in Ho Chi Minh

PTI Education Training Group, 1st Floor, Rivera Park Saigon Building, 7/28 Thanh Thai Road, Ward 14, District 10, Ho Chi Minh. Email: info@pti.edu.vn

Website: https://pti.edu.vn

Hotline: 0986 511 822