Sustaining Growth in a Volatile Global Environment
Economic Challenges and Opportunities Amidst Trade Tensions
In the current landscape, businesses worldwide are grappling with challenges exacerbated by escalating global trade tensions. The reciprocal tariff measures between the US and major economies like China create both hurdles and opportunities. With the US-China trade war intensifying due to the US imposing an additional 10% tariff on goods imported from China, alongside a 25% tariff on imports from Mexico and Canada, businesses must adapt swiftly.
Vietnam’s Export Sector Poised for Growth
As US tariffs on Chinese goods rise, Vietnam stands to benefit as an attractive alternative supplier. Nguyen Kim Thanh, CEO of Sa Ky Foods JSC, believes that the current scenario presents unique opportunities for Vietnam’s seafood industry, particularly for products like tra fish, tilapia, tuna, and shrimp.
Key Takeaways:
- Vietnamese firms could see increased orders from US importers seeking new suppliers.
- Sa Ky Foods aims to grow its US market share by 40-60% in 2025.
- Benefits from trade agreements like CPTPP and EVFTA offer a competitive edge.
However, Nguyen Kim Thanh also cautions that competition will be fierce. Other countries like India, Indonesia, and Thailand will also aim to capitalize on these opportunities. Thus, competitive pricing and adherence to US product standards are crucial for sustaining market share.
Agriculture and Coffee: Navigating Price Volatility
In Vietnam’s Central Highlands, Hoang Danh Huu, founder and CEO of Miss Ede, a coffee export company, emphasizes the risks posed by fluctuating raw coffee prices and global trade tensions. This volatility requires careful planning, especially for agricultural and coffee exports to the US and EU markets.
Strategic Responses:
- Simexco Daklak is closely monitoring the US market to mitigate potential disadvantages.
- The company engages with over 45,000 farmers and utilizes more than 50,000 hectares of sustainably developed areas.
- Broadening export markets to avoid over-dependence on key markets like the US and EU is essential.
Diversification as a Tool for Sustaining Growth
Many Vietnamese businesses are adopting diversification strategies to ensure resilience amid global uncertainties. By diversifying markets and leveraging trade agreements, companies can mitigate risks associated with import market dependencies.
Diversification Techniques:
- Engaging alternative markets, including Canada, Japan, and the EU.
- Utilizing the Vietnam-EU Free Trade Agreement to source cheaper raw materials from the EU.
- Optimizing HS Codes to reduce tariffs and enhance global competitiveness.
The Crucial Role of Government Support
Navigating these challenges also requires robust support from the Vietnamese government. As international trade dynamics continue to shift, businesses anticipate several supportive measures.
Government Support Initiatives:
- Reducing import taxes on essential raw materials.
- Waiving export taxes on strategic products.
- Providing preferential loans for production investments.
- Lowering logistics costs and developing direct transportation routes to key markets like the US.
- Pursuing new free trade agreements for expanded market access.
Conclusion
As global economic tensions continue to unfold, the strategies employed by Vietnamese businesses in response to the US-China trade war offer a compelling blueprint for sustaining growth amidst volatility. By proactively exploring new markets, investing in technology, and optimizing supply chains, Vietnamese exporters can effectively navigate this complex landscape and ensure robust growth in the coming years. Amid these challenges, the commitment to diversification and strategic planning emerges as a key factor in securing long-term success.
Source: https://vir.com.vn/sustaining-growth-in-a-volatile-global-environment-124020.html