More Than 90000 Factories In Vietnam Shut Down, The United States Will Impose Tariffs On Vietnam!

Since the beginning of the year, nearly 93500 enterprises in Vietnam have closed down, an increase of 15.6% year-on-year. The epidemic situation of new crown pneumonia is complex and changeable, which is having a negative impact on the production activities of domestic enterprises in Vietnam.

On December 23, Vietnam's Saigon Liberation Daily reported that nearly 93500 enterprises in Vietnam had closed down, an increase of 15.6% year-on-year. The epidemic situation of new crown pneumonia is complex and changeable, which is having a negative impact on the production activities of domestic enterprises in Vietnam.

As for the production field of textiles and clothing, Wu Dejiang, chairman of Vietnam textile and Garment Association, said that by the end of November this year, the export volume of textile and clothing industry had reached nearly 30 billion US dollars, and it is estimated that this year's export volume will only reach 35 billion US dollars.

Although the export volume in this field is quite stable, many textile and garment enterprises have begun to tire.

A screenshot of Saigon Liberation Daily in Vietnam

In fact, the number of orders received by enterprises is not large and the growth value is not high.

As for the suit manufacturers, there has been no order since the second quarter. Some enterprises have to make limited production and switch to the production of masks and protective articles at the same time. However, orders for the above-mentioned products are also declining as countries have transformed their production and supplemented the supply of goods which is partially lacking due to the sudden increase in demand in the second and third quarters.

At the same time, Ruan Fangdong, deputy director of the Municipal Department of industry and commerce, revealed that this year is a year when enterprises have encountered many difficulties. Since the beginning of the year, nearly 30000 enterprises in the city have closed down.

The city's industrial production index has been increasing year by year, but it will be the opposite in 2020. The index of industrial production in the first 11 months fell by 4.4% year-on-year. Among them, the processing and manufacturing industry decreased by 5.1%, the power production and marketing sector decreased by 1.5%, and the water supply and waste treatment sector decreased by 0.4%. The production index of some areas decreased by 22.9% year-on-year, such as wood processing, wood and bamboo and rattan products.

It is worrying that economic difficulties are increasing.

At present, the enterprises in Vietnam and the city are facing the crisis of shortage of imported raw materials, while the export market is decreasing, because some markets which were originally important partners of Vietnam are coping with the new wave of epidemic, such as the European Union, Japan, South Korea, the United States, etc.

On the other hand, President Wu Dejiang is worried that the proportion of export volume between foreign direct investment (FDI) enterprises and domestic enterprises in many fields is becoming more and more relaxed. For example, in the field of textiles and clothing, the export volume of FDI enterprises accounts for 65%, and that of domestic enterprises accounts for 35%. For leather shoes and handbags, the export volume of FDI enterprises and domestic enterprises reached 73% and 27% respectively.

In particular, the export volume of FDI enterprises in the field of electronics has reached more than 90%.

Ministry of industry and trade of Vietnam:

Trade sanctions imposed by the United States on Vietnam will have a negative impact on bilateral trade

According to Reuters, the U.S. Department of Commerce will continue to impose tariffs on Vietnamese goods from December because it believes Vietnam underestimates the value of the Dong.

Vietnam's Ministry of industry and trade stressed that Vietnam regrets the decision made by the office of the U.S. Trade Representative (USTR) to investigate Vietnamese currency and timber products on October 2, 2020, which is in a good period of diplomatic, cultural and economic relations between Vietnam and the United States.

After the US trade representative office decided to carry out the investigation, the Ministry of industry and trade reported the relevant situation to the prime minister and proposed the overall solution.

At the same time, Vietnam also informed the US side that it is willing to cooperate closely with the US side in the investigation process.

The Ministry of industry and trade believes that in recent years, many well-known associations, organizations, enterprises and individuals in the United States have successively issued strong voices against sanctions and all attempts to levy taxes on Vietnamese goods, because this completely violates the interests of the state and the enterprises and people of the two countries.

The representative of the Ministry of industry and trade stressed that if the U.S. trade representative's office intentionally unilaterally accelerated the process of sanctions against Vietnam's exports, trade exchanges between the two countries and even bilateral relations would be adversely affected.

The Ministry of industry and trade pointed out that the biggest victims will be the business circles, producers and consumers of the two countries. From the Vietnamese side, Vietnamese companies will no longer feel safe doing business with US companies. This may lead to a decrease in the import of raw materials and technologies from the United States, thus reversing the trend of strong growth in imports from the United States in recent years.

I wake up,

The United States suddenly turned its face on Vietnam's "world factory"!

As Vietnam is rushing all the way to the next "factory of the world", as expected, the United States has turned its back on Vietnam.

As Vietnam is rushing all the way to the next "factory of the world", as expected, the United States has turned its back on Vietnam.

You know, not so long ago, Vietnam seemed to be the darling of the United States. On December 16, the U.S. Treasury identified Vietnam as an exchange rate manipulator and will list Vietnam as the target of sanctions. Vietnam is becoming a manufacturing hub, and its exports to the United States have soared, arousing the vigilance of the trump administration. Vietnam is a country that mainly develops its economy by attracting foreign investment, and the US sanctions may affect its national strategy. If you remember correctly, this is the first time Vietnam has enjoyed such treatment.

What are exchange rate manipulators?

1. The trade surplus with the United States exceeded 20 billion US dollars;

2. The degree of foreign exchange intervention is higher than 2% of GDP;

3. The global current account surplus exceeds 2% of GDP.

Vietnam's trade surplus with the United States in the past year is 58 billion US dollars, surpassing Japan's 57 billion US dollars, ranking fourth, and meeting the three criteria.

As long as these three conditions are met, they will be on the blacklist of the United States. The only other country on this list is Switzerland.

The reason is very simple, the U.S. economy is weak, Vietnam's economy is very good. In the first nine months of this year, Vietnam's exports to China increased by 15%, while exports to the United States grew faster by 23%, reaching US $54.7 billion.

In addition, the U.S. Treasury also added Taiwan, Thailand and India to the exchange rate monitoring list. At present, there are 10 countries and regions on the list, including China, Japan, South Korea, Germany, Italy, Singapore and Malaysia.

America hates its teeth

Vietnamese officials responded with low profile

The Vietnamese are happy to export, but the Americans are biting their teeth.

Vietnam is rich in labor, and foreign direct investment (FDI, approved) in 2019 increased by 7.2% to US $38 billion compared with 2018. This is 1.8 times that of 10 years ago, the highest level in history. Samsung Electronics of South Korea will transfer all mobile phone production in China to Vietnam in 2019. Samsung alone accounts for a quarter of Vietnam's total exports.

Under the new epidemic situation, foreign enterprises have transferred part of their production to Vietnam, which also accelerated the increase of Vietnam's export to the United States. Vietnam controlled the first wave of new outbreak as soon as possible, which did not have a great impact on the production activities of enterprises, but also played a positive role.

The report listed Switzerland and Vietnam as exchange rate manipulators, saying the two countries continued to intervene in the foreign exchange market to limit the appreciation of their currencies. The U.S. Treasury said that at least part of the foreign exchange intervention measures of the two countries in the past four years was to prevent effective balance of payments adjustments, and Vietnam also tried to gain an unfair competitive advantage in international trade through exchange rate management.

In a statement, U.S. Treasury Secretary mnuchin said the United States will take strong measures to ensure that its workers and enterprises benefit from economic growth. The U.S. Treasury Department will follow up its investigation results on Vietnam and Switzerland, and strive to eliminate the practice of creating unfair advantages over foreign competitors.

In this regard, the National Bank of Vietnam issued a relatively gentle announcement on the 17th. In the announcement issued on the 17th, the National Bank of Vietnam stressed that Vietnam has controlled the exchange rate under the framework of monetary policy in recent years, with the purpose of curbing inflation and boosting macroeconomic stability, rather than seeking unfair competitive advantage in international trade.

The young man

Vietnam's central bank said the trade surplus and current account surplus with the United States were caused by the characteristics of the Vietnamese economy. But the bank also said it would work with the US government to ensure "harmonious and fair" trade relations.

If a country lists another country as an exchange rate manipulator, it must impose severe trade sanctions on another country accordingly, which is likely to trigger a large-scale trade war between the two countries and spread all over the world.

Therefore, once identified as a "exchange rate manipulator", the defined country's export will decline, which will seriously drag down the overall export of the defined country (exporting country), the industrial chain will be more broken, and the unemployment rate will rise rapidly.

This time, can Vietnam hold up?