Impact of the US tax reform on Vietnamese goods

	Export businesses need to meet stringent US standards
	China, Korea and the US are the leading trading partners of Vietnam
	Catfish exports to US face shutdown in 2017

Double difficulty

Under the US tax reform law, the corporate income tax falls from 35% to 21%. The profits of US companies earned from doing business abroad will mostly be taxed or taxed at the highest level of 10.5%. In addition, the US also applies policies on reducing trade deficit, protecting domestic goods and imposing high anti-dumping tax on imported goods to the US

Talking to Customs reporters, Secretary General of Vietnam Association of Seafood Exporters and Producers (VASEP) Truong Dinh Hoe said that over the past 10 years, the US has repeatedly applied anti-dumping measures for Vietnamese seafood. This is protectionist barrier by the US for its domestic production. Seafood enterprises still have to make efforts every year, take measures to respond and overcome barriers to continue the export. Under the US tax reform law, when incentives for its domestic production and protection of domestic goods are increasing, our seafood industry will face more certain difficulties. It can be said that the seafood export to the US will face double difficulty.

In addition to seafood, the steel industry is also struggling with the strict policies on protecting their domestic goods in the US. Specifically, the US has recently imposed anti-dumping and countervailing taxes on coated steel products and cold rolled steel imported from Vietnam, because these products originated from China. Coated steel products are subject to anti-dumping and countervailing taxes of 199.43% and 39.05% respectively. Meanwhile, cold rolled steel is subject to the above two taxes of 256.79% and 256.44% respectively. The US Department of Commerce stated that "Vietnamese exporters will not have to pay anti-dumping and countervailing taxes if they can prove that the steel exports to the United States are made in Vietnam or a third country excepting China. "

Regarding the tax imposition mentioned above, Vice Chairman of the Vietnam Steel Association (VSA) Nguyen Van Sau shared that Vietnamese steel is suffering from unfair treatment caused by Chinese steel. The conclusion from the US was unfounded and the VSA had submitted its proposal to relevant ministries and have even planned to take the case to the WTO court if the US do not change its decision.

Many experts identified that the new US tax reform law would have a major impact on Chinese goods. However, in the coming time, products, especially those with high content of raw materials and components imported from China, will be in a high risk of imposition of anti-dumping, which is a serious concern.

Opportunity for quality goods

Regarding the US story of protection of its domestic goods, Mr. Hoe analysed that seafood exporters were not afraid to compete in the US. "Despite tightening imports, the US still needs large seafood imports because it is not easy to develop shrimp farming. Currently, in the world, the main supply of shrimp and fish is still in the Asian region. The key to the costs of the seafood industry is not the processing stage, but is the raw materials. If the US can develop shrimp farming, it will be very difficult to reduce costs," Mr. Hoe said.

According to Hoe, the most important issue is that the export products to the US must ensure food safety and hygiene and be appreciated by the consumers. For products of the same type, the better and most prestigious products will dominate. "Quality and prestige goods will always be welcomed”. During past times, many seafood export companies have focused on ensuring food safety and hygiene and conquered markets, including the US market," he emphasized.

Not only in the seafood industry, but also in the export of agricultural products, and although the United States is a fastidious market, many Vietnamese fruits have penetrated the US market. At the end of December 2017, the first shipment of star apple was exported to the US, marking Vietnam as the first country to export this fruit to this market. The key point was that all shipments of star apple exported to the US met the technical conditions and transparency of origin, such as area planting code, packaging codes, radiation processing code., etc.

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Considering the story of exports to the US, an expert expressed his optimism to say that the difficult time meant that many opportunities were open if Vietnamese companies made good use of them. Although the US protects its domestic production, its production is not sufficient to supply the whole country. Vietnamese companies which are interested in the market can establish a branch in the US and enter into the market in a methodological way.