Photo: VASEP/FIS

Navigating Tariff Turbulence: VASEP Calls for Urgent Government Support Amidst U.S. Trade Blow

VIET NAM
Tuesday, April 22, 2025, 05:00 (GMT + 9)

Vietnam’s seafood industry faces major disruption as U.S. imposes high tariffs; VASEP urges swift action to sustain production and market competitiveness

On April 10, 2025, the Vietnam Association of Seafood Exporters and Producers (VASEP) submitted Official Letter No. 50/CV-VASEP to Deputy Prime Minister Bui Thanh Son and relevant ministries, urgently proposing measures to support the seafood sector following the U.S.'s imposition of retaliatory tariffs on Vietnamese imports.

The U.S. remains one of Vietnam's top two seafood export markets—alongside China—with annual exports reaching $1.8–2.1 billion over the past three years, comprising nearly 20% of Vietnam's total seafood export turnover. It is especially critical for shrimp, tuna, and pangasius exports. Over two decades, Vietnamese seafood has become a staple in the American market, helping position Vietnam as a leading global supplier.

However, as of April 9, 2025, the U.S. has enacted a reciprocal tariff of up to 46% on Vietnamese imports. This dramatic rate poses a severe threat to Vietnam’s competitiveness, especially against rivals like Ecuador, India, Thailand, and Indonesia. If unadjusted, the high tariff could cause a sharp decline in exports, triggering widespread challenges—such as inventory buildup, disrupted cash flows, heavy debt burdens, stalled production, and job losses across the industry.

Temporary Relief and a Window of Opportunity

In a slight reprieve, the U.S. announced on April 10 a 90-day delay in implementing the full 46% tariff for Vietnam and 74 other countries, during which a 10% rate will apply. China alone will face a 125% tariff. This grace period provides a brief opportunity for Vietnamese businesses to sustain operations and for negotiators to secure a more favorable outcome.

Still, VASEP warns of broader risks—such as pressure to divert exports to Chinese markets, which could intensify competition and pricing challenges.

VASEP's Two-Pillar Support Proposal

To proactively address the crisis, VASEP has gathered input from enterprises and proposed two key support packages:

Support Package 1: Ensuring Continuity of Production and Market Competitiveness

1. Regulatory Adjustments for Smooth Production

• Streamline certification and export documentation: Urging MARD to finalize and submit amendments to fisheries-related decrees to facilitate valid raw material documentation for EU and FTA markets.

• Create a Fisheries Technology Development Fund: Modeled after successful international examples, financed via a percentage of export turnover, to foster innovation and investment.

• Revise testing regulations: Suggest including MRPL standards in testing for banned antibiotics to facilitate both domestic and export markets.

• Clarify food safety and repurposing rules: Update Decree 15/2018 to allow seafood originally destined for export to be redirected to the domestic market.

• Advocate IUU exemptions for specific shrimp sources: Particularly for nearshore-caught shrimp, to maintain EU access.

• Expand mollusk farming certifications: Incorporate scallops into monitoring programs to enable EU exports.

• Review unrealistic import-based criteria: Particularly DNA testing in fishmeal for non-target animals (goats, horses).

2. Tax, Finance, and Infrastructure Relief

• Land rent and VAT policies: Extend land rent exemptions and accelerate VAT refunds.

• Stimulate consumption: Maintain reduced VAT rates through 2026.

• Clarify corporate tax treatment: Codify seafood processing as eligible for income tax incentives.

• Sustain credit access: Maintain the VND 100 trillion credit package and reduce interest rates, restructure debt repayment terms.

• Lower power costs: Reduce electricity rates for refrigerated containers stuck at ports.

• Expand solar capacity: Allow rooftop installations up to 2MW and buy back excess power up to 30%.

• VAT guidance for by-products: Clarify taxation rules for unprocessed seafood by-products.

3. Labor and Market Policy Enhancements

• Social insurance flexibility: Allow delayed contributions and expand unemployment benefits.

• FTA adjustments: Push to remove shrimp quotas under the VKFTA and adopt cumulative origin rules in EU FTAs.

• Labeling clarity: Standardize export labeling for processed products made from imported raw materials.

• Avoid inspection overload: Suspend routine inspections for compliant businesses during 2025–2026.

Support Package 2: Diversifying Markets and Promoting Trade (2025–2026)

To counterbalance potential losses from the U.S. market, VASEP proposes intensified trade promotion in both established and emerging markets.

Sustaining Key Trade Fairs in 2025

• North American Seafood Expo (Boston): Request full cost coverage if businesses are financially constrained.

• Global Seafood Expo (Barcelona): Support for events like receptions, cooking shows, and B2B networking.

• Asian Seafood Fair (Singapore): Budget support for small and mid-sized enterprises participating.

• China Fisheries Fair (Qingdao): Sponsor national pavilion and networking events.

• Korea Seafood Expo (Busan): Leverage diplomatic channels for cost reductions and sponsorships.

Entering New and High-Potential Markets

VASEP proposes 100% booth support for participation in emerging trade shows:

• Gulfood (Dubai) – A gateway to MENA markets with low import taxes.

• Finefood Australia (Sydney) – Access to Australia and the wider Asia-Pacific.

• Food Expo Pro (Hong Kong) – Tapping into demand for high-quality, safe products.

• Latin American Seafood Expo (São Paulo) – Especially promising after Brazil’s market opening to Vietnamese shrimp and pangasius.

Conclusion: Unity, Action, and Sustainable Growth

VASEP expresses full confidence in the Government and the negotiating delegation currently in the U.S. (April 6–14, 2025). However, immediate and decisive support is vital to help enterprises maintain operations, protect jobs, and navigate market shocks.

Timely policy interventions will not only help Vietnam weather this challenge but also set the foundation for more resilient, diversified, and sustainable seafood exports.

editorial@seafood.media
www.seafood.media

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