TAIPEI (TVBS News) — U.S. tariffs imposed a 20% tariff on Vietnamese goods have prompted Taiwanese businesses in Vietnam, including cast iron manufacturers, to consider relocating operations. Lo Shih-liang (羅世良), chairperson of the Council of Taiwanese Chambers of Commerce in Viet Nam, Ha Noi Branch, told TVBS on Tuesday (July 8) that he might explore alternatives such as setting up factories in Mexico or other low-tariff countries.
Lo, whose cast iron cookware business heavily relies on the U.S. market, faces significant challenges. He imports raw pig iron from Brazil, which, coupled with the new tariff, pressures him to negotiate cost-sharing with clients. Lo said he plans to fly to the U.S. at the end of the month to discuss distributing the tariff costs with his top 16 clients.
Addressing the challenge, Lo may split 50-50 with clients first, as some product profits barely reach 10%, which means businesses won't hold because of additional tariffs. He added that relocating operations presents risks, as depreciation of machinery and factories means production must continue, even without profit.
The Trump administration's trade agreement with Vietnam imposes a 40% tariff on transshipped goods to prevent tax evasion, further complicating the situation. Despite some production capacity in China, Lo finds the tariff rates there unappealing. He sees potential in Central and South America, particularly Mexico, which offers proximity to raw materials and existing warehouse facilities. He remains cautious, stating that the current strategy is to play it by ear