Enterprises need to be careful with trade protection measures when exporting to the US market

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The United States tends to increase supervision with commodities and countries with large trade surpluses, which increase rapidly in a short time, including Vietnam.

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The Ministry of Industry and Trade has identified that the trend of investigation and application of trade protection measures to Vietnamese goods has signs of an increase.

Export goods of Vietnam have been investigated for trade defense with the affected turnover of up to 12 billion USD. Notably, the number and turnover of cases is increasing rapidly in recent years. If there were only 16 new initiation cases recorded in 2019, only the first nine months of 2020 recorded a doubling of cases (32 cases).

Concerning the above issue, the seminar on legal exports to the US market was organized by the Ho Chi Minh City Trade and Investment Promotion Center (ITPC) on January 21.

According to the Department of Industry and Trade of Ho Chi Minh City, by 2020, the total export turnover of Ho Chi Minh City enterprises through the country’s border gate is estimated at 43.81 billion USD, up 3.1% compared to 2019 (the same period increased by 10, 7%). The total export turnover of the city’s enterprises through the city’s border gates (excluding crude oil) is estimated at 38.53 billion USD, up 2.9% compared to 2019.

The total import turnover of city enterprises across the country’s border gates was estimated at 50.87 billion USD, down 1.1% compared to 2019. The total import turnover of city enterprises through the city border gates for the whole year. 2020 is estimated at 43.37 billion USD, down 1.6% compared to 2019.

Ho Chi Minh City As a locality with a large volume of import and export goods, in recent years, many businesses in the area have been caught in trade defense issues of importing countries, especially the US.

Mr. Tran Phu Lu, Deputy Director of Ho Chi Minh City Trade and Investment Promotion Center (ITPC), said that Vietnam participates in many Free Trade Agreements (FTAs), besides the advantages of enjoying the tariff incentives have helped boost exports of goods, sectors where Vietnamese businesses have to face more trade defense lawsuits. This requires businesses to improve their proactiveness, along with state management agencies to effectively respond to trade defense measures of countries.

According to statistics of the Ministry of Industry and Trade, as of the end of September 2020, the ministry has recorded and handled 193 foreign trade defense cases applied to Vietnam, including 108 anti-dumping cases, 22 anti-subsidy cases, 23 cases of tax evasion, 40 cases of self-defense.

The majority of goods subject to trade defense investigation are Vietnamese ones with production advantages such as: metals, fibers, seafood, plywood, construction materials, chemicals … Trade defense checks for Vietnam’s exports are: the US, India, the European Union (EU), Turkey, Canada and Australia.

Mr. C. Matthew, Attorney at Dentons International Law Firm, shared that the US is a large consumer market and a trading partner that many countries want to penetrate. Each phase and different partners, the United States will adjust different trade policies to protect the interests of the nation.

The United States tends to increase scrutiny with commodities and countries with large trade surpluses, growing abnormally rapidly in a short period of time, and particularly concerned with the issue of the true origin of the goods.

Meanwhile, over the past time, Vietnam has many favorable conditions to increase exports to the United States when attracting foreign investment in production and exports, taking advantage of opportunities from a breakdown of supply chains. and the market gap in which the previous US partner was imposed with trade remedies.

But, the increase in turnover of some products will make them face the risk of lawsuits and trade remedies. If tax is imposed, the whole industry will have to bear common and it is difficult to compete, even give up the market because the US trade defense tax rate is often very high.

Therefore, businesses must understand and regularly update the US legal system. In addition to federal law, there are separate laws of each state. In addition, it is important to understand trading partners to avoid high-risk transactions.

Enterprises importing raw materials or semi-finished products from a third country to process, process and then export to the United States need to pay special attention to the history of trade in such goods between the United States and the third party; absolutely do not use raw materials, products that are being applied trade remedies by the US to export to the US.

In addition to export activities, Vietnamese businesses also need to learn and promote the import of raw materials and goods from the United States to serve production, consumption and export needs again with high added value. more towards a balanced and sustainable US-Vietnam trade relationship.

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