Latest news with #ThanhCong
Straits Times
05-05-2025
- Business
- Straits Times
Vietnam's factory workers are living in fear of Trump's tariffs
HO CHI MINH CITY – For Vietnam's legion of factory workers, the mathematics of making a living was complicated enough before US President Donald Trump announced a whopping tariff on the goods they make. Ms Nguyen Thi Tuyet Hanh worked two factory jobs, six days a week, for nearly a year after her husband lost his job in 2023. She had no other choice as she had to help feed their four children and keep them in school. 'It was brutal,' Ms Hanh, 40, said. Her husband is working full-time again at a factory, but Mr Trump's plan to put a 46 per cent tariff on imports from Vietnam hangs over their family, which lives in a row of concrete tenements on the outskirts of Ho Chi Minh City. 'My family lived through that difficult time – I don't want to live it again,' said Ms Hanh, who earns US$577 (S$747) a month as a line manager overseeing 138 workers making shoes for Nike, French sporting goods company Salomon and other global brands. Fear is reverberating on her factory floor, alive with the hum of sewing machines stitching the fabric for shoes that are shipped to the United States. Mr Trump paused the tariff on Vietnam, and similar levies on dozens of other countries, for 90 days. But it hardly matters here. The destabilising prospect that the tariffs will be reinstated is already chipping away at Vietnam's economic growth, which hinges on making things for American consumers. Vietnam's textile and garment factories have paper-thin profit margins – an average of 5 per cent, executives said. While some of them have ramped up production to push out orders before the tariff deadline in July, others have started to cut jobs or have frozen hiring as US retailers have begun to cancel orders. No country has grown more as a manufacturing economy over the past 15 years than Vietnam. But in that time, it has also become increasingly dependent on demand from the US, which contributed to more than one-quarter of its economy in 2024 . 'Everyone is living in great uncertainty now,' said Mr Tran Nhu Tung, chairman of Thanh Cong, a Vietnamese garment manufacturer with factories and a mill in five locations. Its 6,000 workers make clothes for Eddie Bauer, New Balance, Adidas and others. Mr Tung's customers in the US have started asking Thanh Cong to lower its prices. 'This is a great pressure for the company because the profit margin is very low,' he said. Mr Tran Nhu Tung, chairman of Vietnamese garment manufacturer Thanh Cong, said his US customers have started asking to lower its prices. PHOTO: LINH PHAM/NYTIMES Soon after the tariffs were announced, the management team at Thanh Cong began to discuss other regions where it could sell its wares, such as the Middle East and Europe. The company is also talking to its American customers to make sure they can afford hefty new import taxes. 'I don't want to lay off people,' Mr Tung said. 'We try everything to keep our people here.' Thanh Cong has received requests from some US retail customers to increase production, and the company is trying to accommodate that. Mr Tung is optimistic that his government can strike a deal with the Trump administration. Whatever the two countries settle on will matter for the future of his business. Hours after Mr Trump announced reciprocal tariffs on nearly 60 countries, Vietnam's top leader, Mr To Lam, called the US President and offered to reduce tariffs on US imports to zero, urging the United States to follow. He then sent a letter to Mr Trump, requesting a meeting in person with the President in Washington at the end of May to 'jointly come to an agreement'. Mr Tung, who is also vice-chairman of the Vietnam Textile and Apparel Association, said the breaking point for most factories would be a final tariff that was much more than 20 per cent. No country has grown more as a manufacturing economy over the past 15 years than Vietnam. PHOTO: LINH PHAM/NYTIMES Garments from Vietnam are currently taxed at nearly 28 per cent. This includes a new tariff of 10 per cent that the Trump administration placed on all countries April 2, in addition to an existing tariff of roughly 18 per cent on all Vietnamese garments. A final tariff of 20 per cent or more would eat deeply into the profits of both factories and their customers. 'In this scenario, the factory has to reduce its net margin, and then the big buyers from the US would have to reduce their margins and the consumers will have to pay more for their garments,' he said. While things look bad for Vietnam, there is some hope that it will fare better than its neighbour to the north, China, which has been hit especially hard by US tariffs. Vietnam's textile and garment factories have paper-thin profit margins – an average of 5 per cent. PHOTO: LINH PHAM/NYTIMES China's loss could be Vietnam's gain. But a failure to substantially lower the 46 per cent figure would be a moment of reckoning for thousands of Vietnamese companies that make things to ship to the US. For Mian Apparel, it is the uncertainty that is most worrying. Its seven factories and two laundries, mostly in northern Vietnam, employ 12,000 workers who make swimwear, jeans and jackets for brands such as Costco, J.C. Penney, Carter's, Target, Gap and Walmart. 'Uncertainty is not good for business,' said Mr Vu Manh Hung, deputy chief operating officer of Mian Apparel. Clients are pushing him to deliver goods faster. The factories are taking on more workers and finding other ways to produce more before the 90-day pause in tariffs ends. NYTIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
CBC
03-04-2025
- Business
- CBC
'We did not anticipate such high tariffs,' Vietnamese textile official says
Tran Nhu Tung, chair of a Thanh Cong textile investment group, says the U.S. tariff impact could mean more business for countries like Canada to make up for lost American orders.
Yahoo
03-04-2025
- Business
- Yahoo
'Shocking': US tariffs worse than feared for Vietnamese exporters
At a garment factory in Ho Chi Minh City that exports T-shirts and underwear to the United States, staff were alarmed by "shocking" trade tariffs imposed on Vietnam that could severely impact their business. A manufacturing powerhouse that counted the United States as its biggest market last year, the Southeast Asian nation was hammered with a thumping 46 percent tariff in President Donald Trump's global trade blitz. Despite widespread fears it could be a key target over its huge trade surplus with Washington -- the third-largest after China and Mexico -- the size of the levies came as a bombshell for businesses and factory workers on Thursday. "It's truly shocking," said Tran Nhu Tung, board chair at Thanh Cong, a factory in Ho Chi Minh City that makes clothes for DKNY and Walmart, among others. "Especially in the textile industry, we did not anticipate (this). I thought that since Vietnam is a smaller country, the US would not impose such (high) tariffs," said Tung. About 25 percent of his exports currently go to the United States, he added. During the trade war between Beijing and Washington in Trump's first term, Vietnam took advantage of its geographic location and cheap skilled labour to position itself as an alternative manufacturing hub in Asia. Many companies shifted parts of their supply chain, and Vietnam's trade surplus with the United States doubled between 2017 and 2023. Now, big brands such as Nike -- which produced 50 percent of its footwear and 28 percent of its apparel in Vietnam in the 2024 financial year -- face vastly higher costs, which they will have to absorb or pass on to customers, and their shares dropped sharply Thursday. The tariffs could force many to look elsewhere for manufacturing, analysts said. "These products are low margin and price sensitive, prompting major companies to switch orders to countries with lower reciprocal tariffs," said Sayaka Shiba, senior country risk analyst at research firm BMI. The tariffs would "significantly damage" Vietnam's current export-based growth model, which heavily relies on exports to the United States, she said, adding in the worst-case scenario there could be a three percent hit to GDP this year. According to data from the US Trade Representative website, the United States imported $136.6 billion worth of goods from Vietnam last year, representing nearly 30 percent of its GDP. In the wake of the announcement, Hanoi shares tumbled, with its main index closing down 6.7 percent on Thursday, its biggest drop since 2001 according to Bloomberg. - 'Can't eat, can't sleep' - The tariffs have left workers in Vietnam fearing for their futures. "I can't eat or sleep well because I keep worrying about losing my job," said 38-year-old Cao Thi Dieu, a worker at a factory in Ho Chi Minh City that makes shoes for brands such as Nike and Adidas. "How will I manage if I lose my job? How will I continue earning money each month to take care of my two children's education?" she told AFP. Hours after the announcement, Vietnam's prime minister requested the immediate establishment of a "rapid response team" and said Deputy Prime Minister Ho Duc Phoc would head to the United States for a "working visit". "Many here believe (the tariff figure) is more of a negotiation tool than a final position," said Dan Martin of business advisory firm Dezan Shira & Associates in Hanoi. Although Vietnam may hope that it can clinch a reduction, previous charm offensives have not worked. Earlier this week, Vietnam cut import duties on a wide range of goods from liquefied gas and some agricultural products to cars in what appeared to be a pre-emptive attempt to blunt the tariffs. It also announced that it would allow Elon Musk's SpaceX to launch its Starlink satellite internet service in a pilot programme running to 2030. But it appears the Trump administration was too angered by what it sees as Vietnam's role in attempts to get around tariffs imposed on China. "The way the game works with Vietnam...." a White House official told reporters, "they'll set up these facilities, which look like from the air that they're manufacturing facilities, but all China does is ship in Chinese products into these warehouses and off they (Vietnam) send it to us." But a 2024 report by the International Monetary Fund said there was "no clear evidence" of Vietnam's role in facilitating Chinese exports to the United States. "Most manufacturers are not here to game the system," said Martin. "They're here because Vietnam makes strategic and operational sense." lam-aph/slb/lb
