Deputy Prime Minister Pham Binh Minh told the National Assembly Thursday that the trade war will increase exports of some items in the short term but lower it in the long term.
Vietnam’s exports to the U.S. rose 28 percent year-on-year in the first five months, according to the General Statistics Office.
But Vietnam will also face negative trade war impacts. Deputy PM Minh said the trade tension could bring the country’s GDP down by VND6 trillion ($255.54 million) over the next five years.
Vietnam has prepared responses, which include maintaining macroeconomic stability, controlling inflation, monetary stability, improving local businesses’ competitiveness and improving the investment environment, Minh said.
In terms of currency management, the central bank has depreciated the dong by one percent since the beginning of the year, a move that experts say matches the fall of the Chinese yuan against the dollar, to avoid a rush of cheap Chinese goods into Vietnam.
The country also needs to be selective with the increasing number of foreign companies shifting production to Vietnam. It should only permit those with advanced technology that is environmentally friendly, he added.
Vietnam also needs to be aware of foreign products being labeled 'made in Vietnam' to avoid trade tariffs, Minh said, adding that authorities have confiscated many such items recently.
The U.S. has so far slapped a 25 percent tariff on $250 billion worth of Chinese goods, and President Donald Trump has threatened to apply the same elevated levy on remaining imports from China worth around $300 billion.
In retaliation, Beijing also raised tariffs on $60 billion worth of American products.
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