Vietnam’s Trade Dynamics Shift Amid New U.S. Tariffs
Vietnam is bracing for significant changes in its trade relations with the United States as new tariffs proposed by former President Donald Trump loom on the horizon. Set to take effect in 2025, these tariffs could disrupt the Southeast Asian nation's recent economic gains, which were largely fueled by increased exports to the U.S. during Trump's first term.
The proposed tariffs, which could reach up to 46% on certain goods, have prompted Vietnamese factories to reassess their strategies. Previously, Vietnam benefited from a surge in manufacturing as companies sought alternatives to China amid U.S.-China trade tensions. However, the new tariffs threaten to undermine Vietnam's position as a trade winner, potentially leading to a decline in its export-driven growth.
Vietnam's government has expressed intentions to increase purchases of American defense and security products as a countermeasure. This move is seen as an attempt to strengthen bilateral ties and mitigate the impact of the impending tariffs. The situation underscores the delicate balance Vietnam must maintain in its economic relations with the U.S., especially as it navigates the complexities of global trade dynamics.
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What does the United States import from Vietnam?
In 2022, of $127.5 billion in U.S. imports from Vietnam, the top commodity sectors were Machinery & Mechanical Appliances (45.8% of the total U.S imports from the country), Textiles, Footwear, and Headgear (24.1% of such total) and Miscellaneous Manufactured Items (Chapters 94-96) (13.0% of such total).
What is the new tariff on Vietnam?
For Vietnam, this 46 per cent tariff — among the highest imposed — applies to all goods entering the US, a market that absorbed US$142 billion of Vietnamese exports in 2024, according to US statistics.
What does the US export to Vietnam?
Việt Nam's top export sectors, including textiles and garments, electronics, footwear, seafood, and furniture, rely heavily on the US market. The proposed tariffs represent a shock, and businesses are urging the Government to negotiate for a more reasonable rate.
How are tariffs collected in the US?
The tariff, along with the other assessments, is collected at the time of customs clearance in the foreign port. Tariffs and taxes increase the cost of your product to the foreign buyer and may affect your competitiveness in the market.
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