United States: Will Not Cancel Tariffs on Vietnam
U.S. Secretary of Commerce Howard Lutnick: Even if Vietnam cancels all tariffs on U.S. goods, the United States will not cancel its tariffs on Vietnam, because Vietnam re-exports a large volume of Chinese products to the United States.
According to a Bloomberg report on June 4, U.S. Secretary of Commerce Howard Lutnick attended a Senate hearing. Republican Senator John Kennedy asked Lutnick, “If Vietnam is willing to eliminate all tariffs and trade barriers and asks the U.S. to do the same, would you accept this agreement?”
Lutnick: “Absolutely not. That would be one of the most foolish things we could do.” He then explained that Vietnam’s exports to the United States amount to as much as $125 billion, while U.S. imports from Vietnam are only $125 million. More critically, Vietnam imports approximately $90 billion worth of goods from China and then re-exports them to the U.S. market at a markup. This essentially constitutes a trade route from China to the United States.
Currently, Vietnam is striving to reach an agreement with the Trump administration before the tariff suspension deadline (July 9), otherwise, the 46% tariffs will severely impact Vietnam’s exports to the United States. It is reported that these exports account for 30% of Vietnam’s annual GDP.
According to Reuters, following the conclusion of the second round of negotiations between the United States and Vietnam over the weekend, the U.S. handed over a framework text of a trade agreement to Vietnam. The U.S. has put forward a “long list of tough” demands to Vietnam, including requiring Vietnam to reduce the use of materials and components from China and to exercise greater control over its production and supply chains.
As early as April, White House Trade Advisor Peter Navarro had stated that Vietnam’s proposal to eliminate tariffs on U.S. imports was not sufficient to prompt the U.S. government to cancel the announced 46% retaliatory tariffs.
Wanxinda Industrial Park in Batang National Economic Zone, Indonesia
Located within the Batang Industrial Special Zone (KEK Industropolis Batang) in Central Java, Indonesia, the Wanxinda Industrial Park offers flexible factory and land rental and sales services. It helps enterprises quickly establish a presence in Indonesia through a “one-stop” service.
In the current context of the global trade landscape being reshaped, inaction is the most expensive strategy!
As the largest economy in ASEAN, Indonesia is providing a “zero-time-difference” production solution for manufacturing with a combination of national-level economic zones and ready-to-use standardized factories:
-
Tariff Breakthrough
-
Bypass the U.S. 125% additional tariff list on China.
-
Relying on the ASEAN Free Trade Area (AFTA) and the Regional Comprehensive Economic Partnership (RCEP), enjoy zero-tariff export benefits for 90% of goods within the region.
-
-
Cost Lock-in
-
Tax Policy: Enterprises in the Special Zone enjoy a 15-year corporate income tax exemption (full exemption for the first 5 years, and a 50% reduction for the next 10 years); complete exemption of import tariffs on equipment.
-
Labor Costs: 38% of the workforce is under 25 years old, and the average monthly salary in manufacturing is only one-third of that in China.
-
Energy Security: Electricity prices are approximately 0.5 RMB per unit, with peak hours at 0.75 RMB.
-
Employee Social Security: Health insurance premiums are paid at 1% of the salary by both the employer and the employee; pension insurance is paid at 8.4% of the salary by the employer, and work injury insurance is paid at 0.24% of the salary by the employer. (Total less than 10%)
-
-
Ready-to-Use Advantage
-
In Batang Economic Zone of Central Java, 1 million square meters of high-standard factories are available for immediate rent and use.
-
Complete Facilities
-
Adjacent to the highway
-
Bonded area
-
Green and energy-efficient factories
-
One-stop service
-
At this moment, what is rarer than a “cost valley” is a “strategic springboard” resource.
Please contact the Wanxinda Investment Promotion Team immediately to obtain a customized landing plan—starting while others hesitate is the true competitive edge!
The Management Committee of Central Java Economic Zone in Indonesia has bilingual (Chinese and English) staff available to respond 24/7.
