Businesses in Nghe An province face new tariffs imposed by the US.

Potential market

Currently, the United States is Nghe An's fourth largest export market (after China, Hong Kong, and South Korea). In 2024, Nghe An's exports to the United States reached US$256.8 million, accounting for 8.6% of the province's total merchandise exports. This included US$77.4 million for cement; US$59 million for textiles; US$35.4 million for footwear; US$20.37 million for steel and iron products;... The current demand for connections with the United States focuses on the province's strengths, such as agricultural and aquatic products, various types of stone, plastic pellets, construction materials, and electronic components and equipment.

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According to US data from 2024, Vietnam is the 8th largest trading partner of the United States, and the US is Vietnam's largest export market. The trade surplus between the two countries reached approximately $123 billion, ranking 3rd after Mexico and China. The two countries' foreign trade structures are complementary, allowing US consumers access to goods at competitive prices and good quality. In January 2025, Vietnam's exports to the United States increased by 36% compared to the same period the previous year.
The imposition of retaliatory tariffs is intended to encourage countries to reconsider their trade policies and expand market access for U.S. products.

Mr. Nguyen Van Hiep, Head of the Trade Management Department of the Nghe An Department of Industry and Trade, said: The imposition of a 46% countervailing duty by the US on goods, including those from Nghe An province, has posed a major challenge for export businesses.

The first to be affected are businesses that export goods directly to the US, such as cement, textiles, footwear, steel, tiles, fruit juice, seafood, or businesses that export raw materials through their parent companies for export to the US, such as electronic components and solar panels. Businesses face the risk of reduced profits, decreased export orders, and even closure for some small and medium-sized enterprises. They may have to scale back production, cut working hours, and unemployment will increase.

The decline in exports to the U.S. also reduces demand for various supporting industries in the province. Sectors such as transportation, logistics, packaging, and raw material suppliers that depend on export-oriented manufacturing industries are likely to experience a decline in business and revenue.

If import tariffs on Vietnam become too high, US importers are highly likely to seek alternative sourcing options to significantly reduce increased costs. Countries like India, Mexico, and many Southeast Asian nations that are not subject to similar tariffs will become more attractive as potential suppliers. These countries can offer similar product quality at significantly lower import costs, encouraging US businesses to diversify their supply chains away from Vietnam. This shift could have long-term impacts on Nghe An's export volume to the US market.

High tariffs also negatively impact foreign direct investment (FDI) in Nghe An, especially in sectors heavily reliant on the US market (electronic components, textiles, footwear, etc., which are major export sectors of the province). If the US market becomes significantly less viable or profitable due to high tariffs, potential investors may hesitate or delay establishing or expanding export-oriented production facilities in Nghe An, hindering the province's long-term economic development and industrialization goals.

What do businesses say?

Mr. Nguyen Quoc Hung, Assistant General Director of Vilaconic Joint Stock Company, stated: Vilaconic's export market is very diverse. In 2024, the company exported to 90 countries and territories, so the US tariffs will not significantly affect Vilaconic's export business. Currently, Vilaconic's exports to the US mainly consist of high-quality rice. The average price of Vietnamese rice is higher than that of Thailand and India. The US tariffs on Vietnamese rice make it even more difficult for businesses to compete with Thailand and India (which are subject to lower tariffs) in the US market. Vilaconic is coordinating with its exclusive distributor in the US to implement timely solutions to avoid disruptions in the supply chain.

The news of the US imposing retaliatory tariffs of up to 46% has sent shockwaves through Vietnam's textile and garment industry. However, many businesses still hope that the policy will be adjusted according to trade practices and bilateral cooperation. As the garment industry is a vital consumer sector, there is hope for flexibility in tariff adjustments.

As one of the businesses with a large volume of goods exported to the US, a representative of Minh Anh Garment Company stated: "Minh Anh Garment Company exports 95% of its goods to the US. Currently, the export tax is 10%, and the contract is signed until the third quarter of 2025, so there is no immediate impact. However, if the 46% tax remains unchanged, our company, as well as many other domestic textile and garment businesses, will face extremely difficult situations, because some companies export up to 80%, even 90% of their production to this market. Therefore, we hope that the Trump administration may adjust the tax rate to a more appropriate level after the negotiation rounds."

It is known that the average export tariff on Vietnamese garments to the United States will increase from 18% to 46%, the highest among major textile and garment exporting countries to this market, second only to China at 54% and higher than other competing countries such as Bangladesh (37%), Indonesia (32%), India (27%), and Turkey (10%). The imposition of this tariff will have unpredictable impacts on the Vietnamese garment industry in general and Nghe An province in particular. Orders signed until the end of Q2/2025 may be postponed, canceled, or delayed in payment, posing a cash flow risk for businesses. Orders currently under negotiation for Q3/2025 may not be successful. Consumer demand for textiles and garments in the United States will decrease, and people will tighten their spending due to excessively high prices. The trend of shifting orders from Vietnam to other competing countries with lower tariffs will cause localized order shortages, or businesses will have to drastically reduce prices to retain customers. Risk of significant losses due to price reductions to offset increased taxes and preserve jobs.

In response, many businesses say they are currently looking to diversify their markets and seek new customers to reduce their dependence on the US.

On the other hand, the garment industry proposes that the Government consider and direct research and implementation of several solutions to support garment businesses in boosting domestic consumption of textiles and garments: Adjusting VAT to below 8% and reducing personal income tax to increase domestic purchasing power and support the consumption of a portion of the garment industry's output. Stabilizing production costs, temporarily suspending electricity price increases, and increasing the regional minimum wage in the last months of 2025 to reduce the burden of input costs for businesses.

Providing credit support to businesses, without downgrading credit ratings, increasing interest rates, or reducing credit limits for garment businesses experiencing negative production and business results due to market fluctuations, aims to help businesses overcome difficulties and ensure jobs and income for workers.

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According to statistics from the Vietnam Textile and Garment Association, the US has been a key export market for the Vietnamese textile and garment industry for many years. In the first two months of 2025 alone, Vietnam's textile and garment export turnover reached over $7 billion, a 14% increase compared to the same period in 2024, with the US market accounting for 40%. The biggest obstacle currently is the Vietnamese textile and garment industry's excessive dependence on raw materials from China. Therefore, if the origin of these materials is not controlled, the risk of tariffs being imposed is very high. Experts recommend that textile and garment businesses invest in technology to enhance traceability and transparency in the supply chain. The government should implement preferential policies to develop supporting industries, especially the domestic production of raw materials and accessories, to enable businesses to be more proactive in sourcing inputs and strengthen their ability to defend against international trade fluctuations.

Along with the textile and garment industry, businesses in sectors such as electronic components, wood, leather goods, handicrafts, agricultural processing, and food will also be significantly affected if the new tariffs from the US are applied. According to the Department of Industry and Trade, businesses exporting to the US market are currently requesting the Government and the Ministry of Industry and Trade to negotiate with the US side to temporarily postpone the tariff decision to allow time for discussion and find a reasonable solution for both sides. Alternatively, they are requesting a reduction in the tariff rate from 46%, which is equivalent to the average tariff that Vietnam applies to imported goods from the US, which is 9.4%.