86% of Vietnamese manufacturers concerned over US tariffs: PwC survey
Significant challenges anticipated from US tariffs include higher costs (23 per cent) and market shifts (15 per cent), the survey report, titled 'US Tariff Policies: Impact and Pathways' said.
Actions that Vietnamese businesses are taking to prepare for or mitigate the potential impact of such tariffs are classified into three categories.
Vietnamese manufacturers are on high alert due to an uncertain US tariff policy, a PwC survey found. Eighty-six per cent of them are concerned or deeply concerned over the tariffs' impact, while 14 per cent are neutral or have slight concern. Key challenges expected include higher costs (23 per cent) and market shifts (15 per cent). Automation and lean models to boost efficiency are being adopted.
The first is to reduce trade dependency and control high costs. Accordingly, 44 per cent of businesses are diversifying sourcing to other countries, while 34 per cent are negotiating with existing suppliers, the study revealed.
The second strategy is to enhance operational efficiency. Forty per cent of businesses are automating and streamlining processes, while 32 per cent are improving efficiency and reducing waste.
The third is to protect long-term competitiveness. Forty-one per cent of businesses are looking forward to diversifying into new markets, while a quarter of respondents are adjusting pricing strategies.
Companies are realising the risks of overreliance on a single source like China. Diversifying suppliers, especially towards more stable regions, has become essential. At the same time, many are seeing the opportunity to renegotiate supplier contracts to better control costs and improve cash flow, the study found.
In production, automation and lean models to boost efficiency are being adopted. Exporters and domestic manufacturers are actively integrating into local and foreign direct investment supply chains as a practical strategy to optimise costs and enhance competitiveness.
As traditional export destinations become more unpredictable, Vietnamese firms are expanding into the European Union, the ASEAN bloc and Japan.
Fibre2Fashion News Desk (DS)
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