Vietnam Plays with Tariff Rates, Business Confidence Drops

Within the last 16 months, the Vietnamese Government has changed the tariff rate for importing vehicle 5 times.

The current rate of 83% – effective since April 22nd – was particularly effective at dropping business confidence given that it was put into effect on a one day notice. All previous agreements were charged the new rate despite the fact they were made well before anyone new of the new rate.

Luckily for importers and exporters alike, Vietnam not to long ago joined the WTO which put a ceiling on how much the tariff rate can go up. So importers shouldn’t expect more raise unless Vietnam plans to violate their WTO agreement.

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2 Responses to “Vietnam Plays with Tariff Rates, Business Confidence Drops”

  1. john Says:

    what is this tarriff you talk about at 83% ???is that what you have to pay 83% of the price of the car ??

  2. japaneseusedcarimporting Says:

    Tariff is what a government charges when things enter (imports), and sometimes charge for goods leave (exports) their country. The tariff tells Customs how much to charge for duty and import tax.

    The 83% percent is not only the value of the car, but usually also includes any other purchasing costs such as sellers commission, transports fees, and insurance fees.

    Vietnam is particularly high, but there are higher tariffs throughout the world. India has about 4-5 different import taxes that equal out to paying 180% of the CIF (cost, insurance, freight) value. Governments do this when the is a protectionist policy so imports cannot compete with local products.

    Fortunately, most countries have reasonable tariff rates between 2-20%.

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