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Vietnam is attempting to stave off potential new duties from the Trump administration by addressing its trade surplus with the U.S., which hit a record high last year.
Officials from Hanoi met with U.S. Trade Representative Ambassador Jamieson Greer at the White House lasst week, and the American trade czar told Vietnam’s Minister of Industry and Trade Nguyen Hong Dien that “Vietnam needs to have stronger solutions to open the market and improve the trade balance in the coming time,” according to a report from the ministry.
Bilateral trade between the U.S. and Vietnam reached nearly $150 billion in 2024, making the U.S. the Southeast Asian nation’s second-largest export market to China. Vietnam exported $136.6 billion worth of product to the U.S. last year, while it took in just $13.1 billion from American producers. It has the third-largest trade surplus with the U.S. to China and Mexico.
Nguyen told Greer that the country aims to “build a harmonious, sustainable, stable, mutually beneficial economic and trade relationship” with the U.S., per the ministry, and added that “it has no intention of creating any obstacles that could harm workers or the economic and national security of the United States.”
The trade leaders discussed how to achieve “commensurate economic benefits” for the U.S., including the proactive review and removal of trade barriers that hinder American investment and business in Vietnam, while also building effective control mechanisms for trade fraud, including illegal transshipment, originating in the country.
Meanwhile, in Hanoi, Vietnamese Prime Minister Pham Minh Chinh told U.S. Ambassador to Vietnam Marc Knapper Thursday that the country’s government is “addressing current concerns of the U.S. in economic-trade-investment relations,” a government website said. It noted that Vietnam is taking a look at existing import tariffs on goods made in the U.S. and encouraging the importation of more American gas, technology and agricultural products.
PetroVietnam Power, a state-owned liquefied natural gas purveyor, on Friday announced a number of deals brokered between Vietnamese and American corporations, which are said to be worth $4.15 billion, though no details about the individual terms were provided.
The fashion sector has been growing increasingly antsy about the prospect of tariffs on Vietnamese products, as the country’s production market for footwear and apparel has become a natural alternative to China. Vietnam has ascended to become the second-largest sourcing market for apparel and footwear, and American brands are watching with bated breath to see if President Donald Trump will indeed levy reciprocal tariffs against the country.
According to data from the World Trade Organization (WTO), Vietnam’s average applied Most Favored Nations tariff rate for apparel in 2023 was 19.8 percent. “The data shows that, with the exception of China, most other major apparel-exporting countries impose higher tariff rates than the U.S.,” which imposed an average applied MFN duty rate of 11.7 percent in 2023, Dr. Sheng Lu, professor of fashion and apparel studies at the University of Delaware, told Sourcing Journal.
“In other words, if Trump were to strictly implement the ‘reciprocal tariff,’ U.S. apparel imports from most leading sourcing destinations, particularly those in Asia, would face a significant increase in tariffs.” For Vietnam, the impacts would be deeply felt; footwear (8.8 percent), apparel and accessories (8.2 percent), bedding and furniture (13.2 percent) are among the country’s top exports to the U.S., according to 2023 data from the U.S. Commerce Department’s International Trade Administration (ITA).
Tariffs on Vietnam-made products could also impact U.S. firms doing business in the country. In February, a study by the American Chamber of Commerce in Vietnam (AmCham) revealed that the threat of reciprocal tariffs had more than half of 100 firms surveyed, including two-thirds of U.S. manufacturers in Vietnam, afraid that they’d be forced to lay off workers.
A majority (94 percent) of manufacturers said new duties would put significant strain on their businesses as they’d reduce access to the U.S. market. “If these tariffs go through, it will be a major setback for our industry. We rely heavily on exports to the U.S., and additional costs will mean reduced competitiveness,” one member said.
