Vietnam needs a long-term strategy to ensure that export growth contributes to the sustainable development of domestic businesses. Strengthening transparency in issuing certificates of origin (C/O) is essential to avoid the risk of punitive tariffs from the U.S. in the future. Country-of-origin fraud is becoming increasingly prevalent in international trade, and Vietnam has found itself caught in the middle. The country has become a key location for companies seeking to bypass tariffs, particularly during the U.S.-China trade war of 2018-2019. In the past two years, numerous Chinese investors have rushed to set up building material factories in Vietnam. When asked about their target market, they openly admit it is the U.S. This is because tariffs on Vietnamese goods remain significantly lower than those imposed on Chinese exports. For instance, artificial stone products manufactured in China are subject to a hefty 236% tariff when entering the U.S. However, if produced in Vietnam, the rate drops dramatically to just 6-8%, and even lower in Thailand at 3-5%. This stark difference has prompted Chinese businesses to shift production to Southeast Asia, taking advantage of the lower tariff rates. A Chinese investor shared an anecdote illustrating how some Chinese firms invest in ASEAN countries […]
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