Navigating Tariffs: Exploring New Markets, Revitalizing Old Ones

Many export-oriented and domestic businesses are strategizing to mitigate risks by diversifying into new markets, given the uncertainties in the global economy.

Mr. Phong underscored the importance of this strategic direction, leveraging Vietnam’s participation in 17 free trade agreements with over 60 countries and territories, along with 70 bilateral cooperation mechanisms.

Focus and Specialization:

Elaborating on this strategy, Professor Hoang Van Cuong, a member of the National Assembly’s Economic and Financial Committee, suggested that instead of focusing on major markets, businesses should target niche markets. He emphasized the need to think broadly and strategically when approaching new markets.

Given that 95% of Vietnamese businesses are small and micro-enterprises, Professor Cuong highlighted the importance of product specialization and uniqueness in penetrating niche markets. However, he acknowledged the challenges posed by limited resources and the fragmented nature of small and micro-enterprises.

He used the example of OCOP products, where numerous local specialties carry the same OCOP label, leading to intra-brand competition for resources and markets. He suggested that collaboration among producers to create a unified brand would enhance competitiveness and market presence.

Professor Cuong emphasized the need for industry associations and, in some cases, government support to facilitate collaboration and create strategic products to access new markets effectively.

Seeking Opportunities in Challenges:

From a different perspective, Mr. Ngo Sy Hoai, Vice President and General Secretary of the Vietnam Timber and Forest Products Association, suggested that one way to cope with tariff challenges is to rejuvenate existing markets to increase export value.

With Vietnamese wood products reaching over 160 global markets, Mr. Hoai noted that the top 5 markets, including the US, South Korea, Japan, the EU, and China, account for more than 90% of export volume. He pointed out that a 20% tariff on wood exports to the US is not a significant concern, as it is still competitive compared to other countries.

Given that Vietnamese furniture accounts for 38-40% of total US imports, Mr. Hoai emphasized the interdependence between the two markets. He suggested that this is an opportunity for Vietnamese wood businesses to reassess their strategies and seek new growth opportunities in traditional markets.

Some businesses are considering partnerships with US companies to produce on American soil, using US materials and Vietnamese labor, technology, and equipment. Mr. Hoai noted that such initiatives would require collaboration among businesses to form a strong group capable of implementing these strategies effectively.