The new US tariff policy is expected to significantly impact business strategies, production plans, and export operations, especially for key export industries, and many businesses are calling for government negotiations with the US to reduce tariffs and support enterprises.

Strengthening the domestic market

Nguyen Thi Phuong Thao, CEO of May 10 Corporation (CTCP), stated that the company is closely monitoring Vietnamese and US government policies to adjust its business strategies accordingly.

Over the past years, the government of Vietnam has actively negotiated new-generation Free Trade Agreements (FTAs), providing the textile and garment industry with opportunities to export beyond the US, and May 10 is maximizing these FTA benefits.

However, following President D. Trump’s 46% tariff decision, businesses are urging the government to negotiate for lower rates, as the current level is too high.

“This tariff will increase costs, drive up inflation, and reduce consumer demand thus ultimately affecting business orders. May 10 anticipates a 10% decline in orders, and we requests tax and customs support from the government,” Thao emphasized.

Since 60% of May 10s exports go to the US market, the company has already started diversifying its market reach to the EU, Japan, Australia, and others.

In addition, the company is diversifying its raw material sources to reduce dependence on China, particularly amid the US scrutiny of Xinjiang cotton. It is ensuring its supply chain meets compliance standards.

“We are promoting cost-saving measures at every production stage, investing in high-tech equipment to increase productivity, and keeping our prices competitive. Moreover, we are expanding into Vietnam’s domestic market to balance export revenue,” Thao added.

Significant impact, but not a shock

Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), acknowledged that the US is a key export market but noted that Vietnam does not have an FTA with the US. Tariffs were already in place before this decision.

“Vietnamese textile exports are mid-to-high-end, with existing US tariffs ranging from 0% to 27% on various products. Despite tariff changes, US brands still view Vietnam as a long-term strategic market,” explained Giang.

Despite upcoming changes in tariff rates, the impact on Vietnam’s textile and garment exports in 2025 is not expected to be overly ‘shocking’ as described by the VITAS official. What businesses need to do, according to him, is to continue diversifying both export markets and product lines, avoiding over-reliance on any single market.

While the new 46% tariff is applied broadly, the US will determine specific tax rates for different product categories. Major US brands are expected to negotiate with the government to minimize disruptions.

“Businesses should stay calm and wait for diplomatic negotiations, while also continuing to diversify markets and products to reduce dependence on a single country,” he advised.

Experts warned that the 46% tariff will impact all companies exporting to the US, particularly FDI enterprises operating in Vietnam. This could negatively affect global supply chains and Vietnam’s overall economy.

Ministry of Finance: Most US exports to Vietnam subject to only around 15% tariff

VOV.VN - The average tariff rate for US exports to Vietnam is currently around 15%, far lower than the 90% figure claimed by the US, a representative of the Ministry of Finance stated in response to the US decision to impose a 46% reciprocal tariff on Vietnamese goods.