Vietnamese trade office in the US shares solutions to cope with new tariff policies

On April 2 (early morning of April 3 in Vietnam), the US President Donald Trump announced an executive order imposing reciprocal tariffs on 180 economies. The goal is to address the large trade deficit, protect economic and national security, and rebuild the domestic manufacturing sector.

A 10% tariff will be applied universally to all countries starting April 5. Countries with the largest trade deficits with the US will face higher countervailing tariffs, effective from April 9, 2025.

Due to Vietnam's large trade deficit with the US and its higher most-favored-nation (MFN) tariff rate, it will face a 46% import tariff on goods entering the US under President Trump’s new reciprocal tariff policy.

Mr. Do Ngoc Hung, Trade Counselor and Head of the Vietnam Trade Office in the US, stated that certain goods will not be subject to the countervailing tariffs. These include items subject to tax under Section 50 USC 1702(b), steel, aluminum, automobiles, and automobile parts, which have already been taxed under Section 232.

Additionally, there are items such as copper, pharmaceuticals, semiconductors, wood, and all goods that may be subject to Section 232 tariffs in the future. Other categories include gold bars, energy, and certain minerals that are not available in the US.

The affected product groups include seafood, plastics, rubber, paper, pulp, textiles, footwear, machinery, equipment, components, machinery parts, electronics, and more.

Mr. Do Ngoc Hung pointed out that this new tariff order reflects the consistent stance of the US government, which views the trade deficit not only as an economic issue but also as a national emergency, threatening security and the well-being of citizens. The tariffs will remain in place until President Trump assesses that the threat has been resolved or minimized.

Regarding strategies for coping with this situation, Mr. Hung suggested that Vietnam needs to effectively implement cooperation mechanisms and bilateral agreements with the US, such as TIFA (Trade and Investment Framework Agreement) and BTA (Bilateral Trade Agreement).

Furthermore, according to the Head of the Vietnam Trade Office in the US, it is necessary to specify efforts to increase imports of certain US products that align with Vietnam's needs. Attracting U.S. companies to invest in strategic areas and products where the US has an advantage, and where Vietnam has demand as well as the US market's needs, will help increase the US component in products.

At the same time, Vietnam should control its export strategy to the US to avoid sudden increases. It is also important to efficiently utilize and diversify Vietnam’s export markets, leveraging the Free Trade Agreements (FTAs) Vietnam has signed with other countries to create momentum and drive export growth.