Vietnam’s effort to discourage imports to narrow inflation and the trade deficit is butting up against the country’s fair trade commitments to the World Trade Organization. Goods on the “discouraged imports” list are grouped into 297 categories — mostly consumer goods and automobiles.
However, the government has found the WTO ceiling for import taxes has already been reached for 3,406 of the 3,724 products on the list, and most of the others are already taxed within 4% of the cap. As a result, the government now says it will raise taxes on just 11 items — and it’s doubtful that will have much impact on the trade gap.
Such is the double-edged sword Vietnam confronts as the country tackles some of the Asia’s biggest exonomic challenges.