Firms rethink export strategies amid US tariff threat

Firms rethink export strategies amid US tariff threat

Vietnamese firms are taking steps to adapt and expand into new markets and restructure their development strategies amid US tariff threats.

Nguyen Ngoc Luan, director of Meet More Coffee Co.. Ltd, based in Ho Chi Minh City’s Hoc Mon district, shared that the company’s orders in the Australian market have increased by 30 per cent so far this year, a promising sign as US sales may see a downturn in the near future.

In addition to Australia, Meet More is also accelerating its presence in Japan, South Korea, and India, with stable growth since the beginning of the year.

“These are markets we had already targeted prior to the US policy shift. However, with the rapidly changing global economic landscape, we have sped up market promotion efforts and achieved encouraging results,” Luan said.

Firms are taking measures for market diversification to boost efficiency

Although the US remains Vietnam’s largest export market, Vietnam is not alone on the global playing field.

Vietnam's wide range of bilateral and multilateral free trade agreements (FTAs) with different countries has opened doors for firms to access other markets with preferential tariffs and fewer technical barriers.

Phung Quoc Man, chairman of th Handicraft and Wood Industry Association of Ho Chi Minh City, noted that a survey of its 50 export members revealed that 52 per cent of them rely primarily on the US market, which accounts for more than half of their export revenues.

As such, US tariffs could present a significant shock to these businesses.

“However, this also serves as a strategic stress test for Vietnamese firms. If leveraged correctly, it can be a chance to accelerate market diversification, reduce dependency, and enhance internal resilience," said Man.

In addition, Vietnamese businesses can capitalise on the global trend of major economies seeking alternative supply chains.

“This is a golden opportunity to boost domestic production, elevate environmental, social, and governance standards, and improve product quality, paving the way for deeper integration into global value chains,” said Man.

Tran Lam Son, vice chairman of Thien Minh Wood Trading and Services Co., Ltd., shared that while many businesses have aggressively pivoted to the US market and experienced rapid growth, Thien Minh has maintained stability in the European market.

“Now, as the US market faces challenges, Thien Minh is intensifying efforts to expand its EU market share. As a result, we've recorded strong order volumes from the EU, which now account for 60-70 per cent of our total exports, helping us mitigate upcoming risks,” Son said.

Speaking at the 82^nd ‘HUBA Business Café’ seminar organised by the Ho Chi Minh City Business Association on May 10, Can Van Luc, a member of the National Financial and Monetary Policy Advisory Council, outlined potential post-negotiation scenarios and recommended that businesses increase transparency, particularly in product origin traceability and corporate accountability at all levels.

“This is a fundamental solution for addressing these challenges in the near future. At the same time, firms must strengthen internal capacity to better withstand future shocks,” Luc noted.

Agreeing with this perspective, Pham Van Viet, vice chairman of the Ho Chi Minh City Association of Garment, Textile, Embroidery and Knitting, noted that US tariffs on Vietnamese exports should serve as a wake-up call regarding transparency in product origin.

He urged businesses to review and adjust supply chains while deepening integration into global value chains to enhance resilience.

“The textile and garment sector is now aiming to increase the use of domestically sourced materials from around 40 per cent to 60 per cent to minimise origin-related issues and optimise production costs,” Viet shared.

While the outcome of US tariff policies is pending, the proactive adaptation by Vietnamese firms would form a solid foundation for navigating the unpredictable shifts ahead.

VIR