Regarding tariffs, entering the United States (US) market, Vinfast have to pay Import Taxes.

The
Harmonized Tariff Schedule is a document that specifies individual taxes for different categories of goods
being imported to the US (United States International Commission 2023). The United States had a
standard import tariff rate of 2.5% for passenger cars from most countries. This is usually called customs
duties, which is applied to the value of the imported car. Vinfast is not an exception and must pay the
above taxes to the US government. In addition to the basic tariff rate, there are Value Added Tax (VAT).
Vietnam imposed VAT on exported goods. Therefore, goods exported from Vietnam to USA may be
refunded to the exporting company (Vietnam) if certain conditions are met. However, regarding VAT,
since Vinfast is the first Vietnamese company to export car, the company has been approved for
exemption for the VAT duties (Ha Vy 2020). Vinfast is a special case under the Law on Export and and
Import Tax and Decree No.134/2016/ND-CP on guidelines for the law on export and import duties (The
Law on Export and Import Duties 2016, Decree No.134/2016/ND-CP). It is worth noting that both
Vietnam and USA are members of the WTO and CTPPP, therefore Vinfast as a company originated from
Vietnam, benefits from the tariff policy from the two agreements above. However, to benefit from WTO
and CTPPP, Vinfast need to provide the American tariffs authority with Certificate of Origin to prove that
Vinfast cars are qualified to be applied those preferential tariffs under WTO and CTPPP. This seems to be
a problem for Vinfast since the company import a large amount of car materials from other countries such
as China. It is important to note that Chinese goods or goods originated from China is currently under
some restrictions in quota and tariffs from US government because of trade wars and political reasons
(Richard Partington 2019).
Regarding potential advantages, here are some advantages Vinfast has when exporting electric battery
cars to the USA. Firstly, market access: The USA is one of the world's largest automotive markets,
presenting a significant opportunity for VinFast to expand its customer base and increase sales revenue.
Secondly, diversification: Exporting cars to the USA would allow VinFast to diversify its market
presence, reducing dependence on a single market and potentially mitigating risks associated with
economic fluctuations in other regions. Thirdly, innovation and technology: Exporting to the USA may
encourage VinFast to develop and incorporate advanced technologies and innovations to meet the
demands of the competitive US automotive market.
Regarding drawbacks, here are some drawbacks Vinfast may face. Firstly, regulatory compliance: VinFast
would need to comply with various US safety, emissions, and other regulatory standards, which could
involve significant costs and time-consuming processes. Secondly, established competitors: The US
automotive market is highly competitive, with well-established domestic and international brands.
VinFast would face stiff competition from existing automakers such as Tesla and General Motors (Charles
Riley 2023). Thirdly, distribution and service network: Building an efficient distribution and service
network in the USA would be crucial for customer satisfaction, but it could be challenging and require
substantial investment. Lastly, perception and trust: As a relatively new player in the global automotive
industry, VinFast might face challenges in building consumer trust and credibility compared to more
established brands.
Reference list
United States International Commission website (2023). https://hts.usitc.gov/
Ha Vy (2020). VinFast secures exemption from import tax on parts for exported cars. Vietnam Investment
Review. https://vir.com.vn/vinfast-secures-exemption-from-import-tax-on-parts-for-exported-cars-
75514.html
Law on Export and and Import Tax of Vietnam.
https://thuvienphapluat.vn/van-ban/EN/Xuat-nhap-khau/Law-107-2016-QH13-export-and-import-duties/
311423/tieng-anh.aspx
Decree No.134/2016/ND-CP on guidelines for the law on export and import duties.
https://thuvienphapluat.vn/van-ban/Xuat-nhap-khau/Nghi-dinh-134-2016-ND-CP-huong-dan-Luat-thue-
xuat-khau-thue-nhap-khau-323602.aspx
World Trade Organization’s agreements.
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CTPPP).
Richard Partington (2019). Why is Trump imposing tariffs on China and how could it affect global
economy? The Guardian. https://www.theguardian.com/business/2019/aug/02/why-is-trump-imposing-
tariffs-on-china-and-how-could-it-affect-global-economy
Charles Riley (2023). The great electric car race is just beginning. CNN business.
https://edition.cnn.com/interactive/2019/08/business/electric-cars-audi-volkswagen-tesla/