China's tiremaker Sailun Vietnam expected to feel the pinch of Trump tariff

Sailun Vietnam, a subsidiary of Chinese tiremaker Sailun, is expected to be among the businesses in the southern province of Tay Ninh to be directly hit by the U.S. new tariffs, according to a recent survey conducted by the provincial Economic Zone Authority.

U.S. President Donald Trump on April 2 said he would levy 46% tariffs on imports from Vietnam as part of a new wave of global impositions, effective from April 9. The 46% rate for Vietnam is among the highest, only after Laos (48%) and Madagascar (47%).

However, Trump on April 9 dropped his reciprocal tariffs for countries reaching out to the U.S. to negotiate to 10% for 90 days. The 90-day reprieve is applied to nearly 90 nations except for China.

The survey, conducted in response to President Trump’s tariff measures, showed that tire manufacturers with large capital investments, substantial revenues, and a high proportion of direct exports to the U.S., such as Sailun Vietnam, will feel direct impacts.

The company, based in Tay Ninh province's Phuoc Dong Industrial Park, exports 30% of its total production to the U.S.

Meanwhile, ACTR Co., Ltd., a joint venture between Sailun and American firm Cooper Tires, also located in Phuoc Dong Industrial Park, will be hit hard, as more than 90% of its products are shipped to the U.S.

Several tire manufacturing companies that do not export directly to the U.S. are also expected to experience indirect impacts on their production volumes.

Most of the surveyed companies said they have not yet determined the specific extent of the impact. However, some have received notifications from clients about order cancellations and are awaiting a final decision from the U.S.

At a meeting on July 2024 with then Deputy Prime Minister Tran Luu Quang, who is now Chairman of the Party Central Committee's Commission for Policies and Strategies, Sailun chairwoman Liu Yanhua briefed the Vietnamese official on the group’s operation.

Liu, who chairs both the parent company and its subsidiary, said Sailun has established a tire factory in Tay Ninh utilizing Vietnamese rubber as its only source.

Besides, it has set up a research & development center in Ho Chi Minh City and a joint venture (ACTR Co., Ltd.) with American firm Cooper Tires, with total investment to date reaching approximately $1.5 billion.

The Tay Ninh factory is Sailun’s largest overseas manufacturing facility, employing 7,000 workers. It is currently using 100% natural rubber from Vietnam, she said.

Liu expressed her gratitude to the Vietnamese government for facilitating the firm’s investment since 2012 and noted that Sailun will raise its investment by $200 million in Vietnam in the time ahead.

For his part, Quang emphasized the growing trade and investment ties between Vietnam and China.

He suggested Sailun continue applying the most cutting-edge technologies to meet the criteria of a high-tech enterprise, while strengthening connections with Vietnamese businesses, helping them join its value and supply chains.

Sailun Vietnam Co., Ltd. was established on March 20, 2012, covering an area of 60 hectares with total investment capital of nearly $1 billion.

ACTR Co., Ltd. was established in 2019, primarily focusing on the production of truck tires and employing nearly 1,400 staff. Cooper Tires was subsequently acquired by U.S.-based tire manufacturer Goodyear in 2021.

Currently, 24 countries and territories have poured investments into industrial parks and economic zones in Tay Ninh, sited in the Southern Key Economic Region, 100 km from HCMC to the south.

Among them, there are 142 Chinese-invested projects with total registered capital of $5.81 billion, and eight others by U.S. enterprises valued at $34.7 million.

Given the potential export barriers, businesses proposed that the Vietnamese government continue working with the U.S. side to negotiate for the lowest possible tariffs.

At an April 9 meeting between Vietnamese Deputy Prime Minister Ho Duc Phoc, who came to the U.S. in his capacity as special envoy of Party chief To Lam, and U.S. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick in Washington D.C, the two sides agreed to start negotiations on a bilateral trade deal that will cover tax issues.