[Vnbiz] raising import taxes correlated with USD strength?

[Tran Dinh Hoanh]

Dear brother Charles,

Obviously you have never been in business for yourself, so you  are not
thinking the way business people think.  You said, "Why do I think many of
these importers will go out of business?  They paid a lot for their goods
especially with the dollar price, but they can't even
pass the cost onto the consumer.  They will close up shop.  Vietnam is
heading towards a hard economic landing."

Are you telling me that importers are so stupid that they keep buying
expensive products and hoard them in loads but won't be able to sell them,
and they will go bankrupt?

Brother, let us be humble a little.  Importers are smarter and both you and
me.  Let's give them the true respect they deserve.  If they were not
so smart, they would never have become an importer to begin it.

They all will survive the hard times and will do well.  None of them will go
out of business.  Let me repeat this:  No importer will go out of business
(because of the current inflation crisis).  Never underestimate the IQ of
the Vietnamese business people.

Great day, brother.

Hoanh
__________
On Mon, Jun 23, 2008 at 1:39 AM, Charles Vo <cvo7651 at yahoo.com> wrote:

> [ Vietnam Business Forum ]
>
> I agree that overall dollar strength is due to much larger events than
> something in Vietnam.  I am looking at the massive strength in the dollar
> versus the dong in the last two months.  These orders to buy imports were
> placed before the dollar surge.  The huge number of ships at Vietnam ports
> filled with orders of goods to be paid with USD put a rocket ship under the
> dollar vs the dong.  During the June 19th Vietnam investment conference
> call with investors, government officials continually pointed to policies
> put into place that will lower the number of imported goods coming into the
> country which in turn will put less pressure on dollar supply.  I think the
> import taxes exacerbated an already tense situation with inflation forcing
> people to hoard goods.  It accelerated the demand for imported goods which
> in turn will translated into many importers buying way more goods on credit
> than they needed.  Importers lining up en masse to trade dong for dollars
> to pay for their goods definitely impacted the real/black market exchange
> rate.
>
> Why do I think many of these importers will go out of business?  They paid
> a lot for their goods especially with the dollar price, but they can't even
> pass the cost onto the consumer.  They will close up shop.  Vietnam is
> heading towards a hard economic landing.  The only thing keeping Vietnam
> afloat is the continual money from abroad being poured into Vietnam, and
> that is iffy at best in the current environment.



>
> --
> Tran Dinh Hoanh, Esq., LLB, JD
> Washington DC
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