Emergency new rules for Vietnam!Trying to avoid taxes by exporting from Vietnam won't work

- Aug 07, 2019-

In the state of continuous trade friction between China and the United States, many Chinese foreign trade exporters, freight forwarders and customs clearance practitioners try to avoid the risk of tariffs imposed by the United States by using the third party re-export trade through southeast Asian countries.But then, it doesn't work that easily.

In order to prevent certain enterprises from exporting to the United States through Vietnam, the ministry of industry and trade of Vietnam recently issued the criteria for "made in Vietnam" (origin) :

Made in Vietnam, it can be: agricultural products and resources originated in Vietnam;Products finally completed in Vietnam, according to the international HS code standard, must include at least 30% Vietnamese local value added.

In other words, 100% imported raw materials must add 30% of the added value in Vietnam before they can be exported under the label made in Vietnam.

Why Vietnam has this move, in fact, things have long been a sign of things.

"Dirty tricks" under the soaring import and export volume

Vietnam's exports jumped 7.5 percent year-on-year to $145.13 billion in the first seven months of this year, the hanoitimes reported, citing statistics bureau data.Imports surged 8.3% year on year to $143.34 billion.The total value of imports and exports for the seven months was us $288.47 billion.

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From January to July, the United States was Vietnam's largest export market, with exports totaling $32.5 billion, up 25.4 percent year on year.Vietnam's exports to the eu reached us $24.32 billion, up 0.4% year on year.Vietnam's exports to China were $20 billion, up 0.1 percent from a year earlier.

China is Vietnam's largest source of imports. From January to July, Vietnam imported 42 billion us dollars from China, a year-on-year increase of 16.9 percent.South Korea's exports to Vietnam fell 0.8% to $26.6 billion.Asean exports to Vietnam were $18.8 billion, up 5.2% year-on-year.

Such a surge in a short period of time, everyone knows, must be a lot of Chinese goods disguised as Vietnamese products sent to the United States.

Can America be happy with that?

Vietnam panicked at the pressure of punitive tariffs of up to 456 per cent

As U.S. customs officials discovered that "made in Vietnam" plywood sold to the United States by a Vietnamese company was actually made in China.As recently as may, the us Treasury put Vietnam on a "currency manipulator" watch list. In other words, Vietnam may already be under intense us scrutiny.

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In response, Vietnamese customs said in a statement on June 9 that it has found dozens of cases of Chinese products evading U.S. tariffs on Chinese products through "counterfeiting of origin" and "illegal transshipment" during the ongoing trade dispute between the United States and China.The customs department has ordered its offices to check the certificates of origin (co) of products more actively in order to prevent similar ACTS, and to conduct strict inspections and impose heavy penalties on such ACTS.Thailand, Malaysia, India and other southeast Asian countries have followed suit, saying they would not be hurt by the United States.

But that hasn't stopped the United States from "raging," with the Commerce Department saying on July 2 that it would impose punitive tariffs of up to 456 percent on some steel products from Vietnam.

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In fact, for a long time, Vietnam has been pursuing a two-way counterbalance strategy between China and the United States. This punitive tariff undoubtedly shows that the United States is dissatisfied with Vietnam and warns it to take a good position in the sino-us trade dispute and not to be a transit point for China to avoid American tariffs.Vietnam is also aware of this, which inevitably affects Vietnam's economic and trade relations with China and Vietnam's position on the sino-us trade war.

In the foreseeable future, Vietnam will adopt a more cautious and conservative policy in accepting Chinese exports.Vietnam's exports to the us are expected to continue to surge in the second half of 2019 as the trade war between the us and China continues.At the same time, Vietnam will be more strict in its origin management of Made in Vietnam.