Counterpart tax and freight rates – two hot issues at the press conference of the Ministry of Industry and Trade

Adapting exports in the context of countervailing taxes and fluctuations in maritime transport were hot issues at the regular press conference of the Ministry of Industry and Trade, held on the afternoon of June 19.

Deputy Director of the Import and Export Department Tran Thanh Hai informed at the press conference. Photo: C. Dung

At the press conference, Deputy Director of the Import-Export Department Tran Thanh Hai reviewed the progress of the imposition of reciprocal taxes, showing that since April 2, the United States announced the imposition of reciprocal taxes on a number of countries, but on April 9, a decision was made to temporarily suspend the application for 90 days. This allows countries, including Vietnam, to continue to maintain exports at the old tax rate during the suspension period.

As for China, the highest tax rate that the US proposed to apply was 145%. However, after the agreement on May 12, this tax rate was reduced to 30%. This rapid change has seen Chinese goods exported strongly to the US, as businesses took advantage of the period of deep tax reduction.

This has led to a high concentration of goods, ships and containers in this area, causing shipping rates to increase sharply. According to Mr. Hai, this situation is similar to the Covid-19 pandemic, especially on the route from Asia to the West Coast of the United States.

“The shipping cost of a 40-foot container from Asia to the West Coast of the United States used to range from $2,500 to $3,000, but now it can increase to $4,000 or more,” said Mr. Hai.

Besides, local container shortages have also begun to appear, not only in China or Vietnam but also in other countries in the region such as Indonesia, Thailand or Malaysia.

However, the Ministry of Industry and Trade and the Vietnam Maritime Administration assessed that the container shortage in Vietnam is not widespread. Some places have recorded difficulties but not as serious as during the peak of the Covid-19 pandemic.

In addition, the conflict between Israel and Iran is also affecting international shipping activities. This area includes many strategic straits and shipping routes such as the Strait of Hormuz and the Suez Canal.

If shipping vessels were to avoid the area and go around Africa, shipping costs would continue to increase, affecting export costs to Europe and the US East Coast.

With the above reality, Mr. Tran Thanh Hai recommends that businesses need to update the situation to coordinate with import or export partners.

At the same time, more caution is needed in signing contracts related to transportation, logistics and delivery of goods to limit risks, especially in the context of unusual situations such as delayed ships or ships being affected by conflicts.

“Enterprises should also consider alternative transport options. In particular, the intermodal rail route to Europe is currently available and is a potential solution. The Ministry of Industry and Trade, together with the Ministry of Construction and the Ministry of Finance, are closely monitoring developments in the logistics market to provide timely recommendations and support to businesses,” Mr. Hai emphasized.

Source: https://hanoimoi.vn/thue-doi-ung-va-gia-cuoc-van-tai-hai-van-de-nong-tai-hop-bao-bo-cong-thuong-706124.html