Posted on October 20, 2020

Vietnam Duties and Tariffs?

The USA government is now investigating Vietnam for currency manipulation and illegal trade practices(See attached articles).

We are not sure what will happen considering our elections, if a new administration and their attitude towards the Vietnamese, and even China, will be different than the current. A new administration might take all tariffs and duties off the table for Vietnam, and possibly even China. However, the current administration, if they win, will likely try and impose some type of duties on Vietnam eventually to try and bring as many jobs back to the USA as possible. We do not know if this is a matter of months or more than a year, but we do know we should begin preparing our supply chain for a potential move to another country that will hopefully have a longer period without the worry of tariffs and duties. But, where would this be? I do not think you are going to like the answer. You can stay in Vietnam for now however you should definitely be preparing yourself to move a percentage of your supply chain needs to another country in Asia, Mexico, Russia, or other countries that will still provide a lower cost than making the product in the USA.

Of course, it would be so much easier if you could just move all purchased parts back to the USA, but the costs are too high, your bill of materials costs have gotten used to the low cost of imported goods and to try and raise those prices now would mean you would have to lower your margins or force a price increase through to your customers. Neither of those are very savory options at the moment.

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