US removing Vietnam as beneficiary to
have minimal effect
The effect of the removal of Vietnam from the list of
nations receiving US preferential trade benefits on the
former will be minimal as Vietnam has applied subsidies of 2
per cent to goods in all its countervailing duties (CVD)
investigations, according to Le Trieu Dung from the trade
remedies department under the Vietnamese ministry of
industry and trade (MOIT).
The decision, however, could be problematic in the long run
if the US further investigates Vietnamese exports and the
subsidies applied is less than 2 per cent, according to a
ĎVietnam Briefingí document released recently by pan-Asia
multi-disciplinary professional services firm Dezan Shira &
Experts also suggest that the US delisting will have minimal
effects on existing duties on Vietnam, though the move means
that Vietnam will stop receiving some preferential
MOIT also said Vietnamís developing country status with the
World Trade Organisation (WTO) remained unchanged and it
still enjoyed the GSP.
Vietnam however, will have to be even more careful to deal
with origin fraud and trans-shipment as this has been the
source of US tariffs on Vietnam in the past. The tariffs
were imposed to prevent steel products that originated from
China attempting to bypass anti-dumping rules, the document
The Vietnamese government, subsequently, issued new
regulations related to the origin of exported and imported
goods. Most recently, Vietnam issued Resolution 119 in
December 2019 to address trans-shipment and origin fraud.
The move was in line to satisfy US rules of origin
requirements and address the trade surplus.
Vietnamís exports to the United States have continued to
grow. As per WTO data, Vietnamís total import and export
turnover reached $235.5 billion in 2019 and $242.6 billion
in 2018. In the first nine months of 2019, exports to the US
jumped by 34.8 per cent year on year.
The United States is Vietnamís largest export market and
China is Vietnamís largest source of imports.
Overall, Vietnam-US trade will likely to continue to
increase. However, Vietnam will need to be more careful
particularly for industries such as steel, footwear and
agricultural products exports to the US that have been
growing. If it does not, the United States is likely to
impose countervailing duties on products that it deems to
harm its domestic industries, the document cautions.
The US recently slimmed down its list of developing and
least developed countries, thus removing Vietnam from
receiving preferential trade benefits. The move, however,
was not directed specifically at Vietnam but included
several countries such as China, Hong Kong, India,
Indonesia, Malaysia, Thailand, and Singapore among others.