US tax reform to have adverse effects on seafood, garment, footwear sectors

12/03/2018 12:00 - 156 total view

VietNamNet Bridge - Analysts believe that China will suffer the most from the US amended tax law, but Vietnam will also be affected. 

The US has imposed anti-dumping duties on many import items from China. Under the US tax reform law, corporate income tax will fall from 35 percent to 21 percent. 

Most of the profits to be made by US companies from overseas business will bear no tax, or will be taxed at a maximum of 10.5 percent.

In addition, the US has applied policies to reduce the trade deficit, protect domestic goods and apply high anti-dumping duties on imports.

Nguyen Tri Hieu, a respected economist, said in Phap Luat newspaper that Vietnamese products with a high proportion of China-sourced input materials and liable to US anti-dumping duties will face the highest risk. Of these, product items with high export turnover, including seafood, textiles and garments, footwear and steel, would be affected the most.
Vietnamese products with a high proportion of China-sourced input materials and liable to US anti-dumping duties will face the highest risk. Of these, product items with high export turnover, including seafood, textiles and garments, footwear and steel, would be affected the most.

Hieu said the US policies were ‘unpleasant’ and ‘unpredictable’. However, the common principles pursued by the Trump administration are restricting imports and protecting  local production. 

There will be policies associated with tax reform which will cause adverse effects to economies which export products to the US.

Hai Quan newspaper quoted Truong Dinh Hoe, secretary general of VASEP, as saying that the US has been applying anti-dumping duties against Vietnam’s seafood exports to the country over the last 10 years. This was done with an aim to protect domestic production.

Hoe admitted that with tax reform, Vietnam’s seafood exports to the US will meet ‘heaped-up difficulties’.

In addition, steel manufacturing will also suffer from the US policy on domestic protection.

Mostly recently, the US imposed anti-dumping and countervailing duties on galvanized steel and cold rolled steel products imported from Vietnam because of Chinese origin. 

The former bears anti-dumping and countervailing duties of 199 percent and 39 percent, respectively, and cold rolled steel 256.8 percent and 256 percent, respectively.

According to the US Department of Commerce, Vietnamese exporters will not have to pay anti-dumping and countervailing duties if they can prove that steel exports to the US are made in Vietnam or other third countries.

Nguyen Van Sua, vice chairman of the Vietnam Steel Association, said Vietnam steel would bear an unjust punishment because of the inaccurate accusation of having Chinese origin. Sua said the association is considering suing the US before the WTO if the US does not change its decision.
Source: www.english.vietnamnet.vn