Vietnam exporters brace for impact of Trump tariffs

"The situation is tense," Nguyen Dinh Tung, chairman of fruit exporter Vina T&T Group said upon learning that Vietnam will be subject to a 46% reciprocal tariff.

Lach Huyen Port in Hai Phong City, northern Vietnam, January 2025. Photo by VnExpress/Le Tan

Tung’s company has for years selling fruits to the U.S. and paying low tariffs, except on durian, whose rate is up to 16%.

Last year the U.S. imported $360 million worth of fruits and vegetables from Vietnam, of which Vina T&T Group accounted for $62 million.

But the new tariffs could hit his company if American buyers switch to produce from markets with lower tariffs.

"U.S. importers might turn to Thailand and other countries to source products, as a tariff hike of almost 50% will be a major cost burden, especially during an economic downturn."

The U.S. has for long been a major trade partner for Vietnam, which last year exported goods worth $119.5 billion and imported $15.1 billion worth.

The top export items are computers and electronics, machinery and equipment, garments and textiles, smartphones, wood products, and footwear.

These sectors will likely be hurt when the new tariffs come into effect within days, Le Duy Binh, CEO of consultancy firm Economica Vietnam, said.

Companies in supply chains in top export categories would be hit, he added.

Vietnam is among the group of countries subject to the highest tariffs. China, Cambodia, Indonesia, and Myanmar also face tariffs of 34-49%.

Nguyen Minh Duc, an expert in public policy, said the new tariffs would be a disadvantage for Vietnam since competitors in Thailand would only have to pay 36%.

The tariffs are 32% for Indonesia and 17% for the Philippines, he pointed out.

"Electronics, garments, footwear, and furniture exporters in Vietnam will have to pay around 46% in tariffs within a week."

Hoang Anh Tuan, Vietnam’s consul general in San Francisco, said in a social media post that Trump’s new policy reflects his administration’s push to reduce the $1.2 trillion trade deficit the U.S. recorded last year.

He explained that the tariff formula hinges on trade deficits, shifting from industry-specific to country-specific rates based on bilateral trade imbalances such as with Vietnam and China.

He added that Trump views these "reciprocal" tariffs as half of what the U.S. calculated, signaling flexibility and room for bilateral talks.

Some products would be exempt from the reciprocal tariffs. Aluminum, steel, cars, and auto parts, previously hit with a 25% U.S. tariff, will continue to attract that rate.

Gold, copper, pharmaceuticals, semiconductors, wood, and certain energy and mineral products unavailable in the U.S. will also be unaffected.

To restore Vietnam’s competitiveness, Binh urged the government to close the tariff gap with other nations, diversify export markets and bolster the domestic market.

"Many countries have sought to maintain a reasonable export share while elevating their domestic market as a pillar of the economy."

He said the government could cut business administrative costs and support firms further.

He proposed increasing imports from the U.S. of items such as technology products to bring down the tariffs.

Vietnam has negotiating leverage since the government could increase purchases of U.S. helicopters, airplanes, energy, and electrical equipment, he said.

Tran Huu Linh, director general of the Domestic Market Management and Development Agency, under the Ministry of Industry and Trade, said measures to stimulate domestic consumption would be rolled out by studying policies in China and Thailand.

His agency is also working to ease regulatory obstacles faced by businesses, he added.