What cards does Vietnam have in tariff negotiation as US slaps 46%?

The Trump administration was floating the idea of reciprocal tariffs for months, and experts' opinions about this ranged from pessimistic to optimistic. But few expected a rate as high as 46%.

Set to take effect on April 9, the tariff will apply broadly to Vietnamese exports to the U.S.

"The impact will be devastating," a business owner told me.

To grasp the scale of this impact, consider this: If Vietnam's exports to the U.S. remain at $119 billion annually and most goods face a 46% tariff, the total tax burden will be around $54.74 billion or over 10% of Vietnam's GDP.

Some argue that Vietnam will not be at any great disadvantage since other countries also face tariffs. But that is not the case since competing nations have lower rates.

The tariffs are 36% for Thailand, 26% for India, 32% for Indonesia, 24% for Malaysia, 37% for Bangladesh, 17% for the Philippines, and 29% for Pakistan.

Vietnam's rate is matched only by those of Cambodia, Laos, Sri Lanka, and China, which puts its goods at a 10-20% cost disadvantage against key competitors.

The most severely affected industries will be electronics, textiles, footwear, and furniture.

Over the long term, multinational companies may rethink their production and investment in Vietnam, which could slow the country's economic growth.

Containers at Tan Cang Cai Mep Port in southern Vietnam. Photo by VnExpress/Dang Khoa

So what will Vietnam do over the next week?

At a meeting this morning Prime Minister Pham Minh Chinh addressed the issue.

What options does Vietnam have?

One option is cutting tariffs on U.S. goods. Vietnam has already taken steps in this direction, lowering most favored nation import duties on various American products on March 31.

But with reductions ranging from 2% to 25% and total U.S. imports to Vietnam at just over $10 billion, the impact is minor. Meanwhile the U.S. seeks to collect over $50 billion from Vietnamese exports.

Another possible bargaining chip is government procurement.

Vietnam, either directly or through state-owned enterprises, could buy more U.S. products. However, this strategy carries risks, as it must balance market access for U.S. suppliers with protecting domestic industries.

Negotiations on these deals remain complex and require careful calculations and swift action to overcome obstacles.

The Trump administration makes a dubious claim that Vietnam imposes a 90% tariff on U.S. imports. The U.S. estimate appears to be based not on import duties alone but also harder-to-quantify elements.

If negotiations shift toward currency policy, Vietnam's central bank may have to strengthen the dong, possibly by selling foreign reserves.

But a large and sudden appreciation of the dong could severely impact the economy.

Other potential measures include easing restrictions on U.S. investors and removing non-tariff barriers. However, these are long-term strategies. Over the next week Vietnam can only make commitments, not implement immediate changes.

The coming days will be tense for officials and business leaders. A Vietnamese business owner told me his company has been in nonstop discussions with U.S. partners since early this morning, addressing both current and future cooperation.

But Vietnamese exporters are not the only ones concerned; there is also worry from the U.S. side.

Many hope the Trump administration is using this as a negotiation tactic rather than an actual move.

I hope not all Vietnamese products will face the full 46% tariff and that the final rates may be lower.

Negotiation is still on the table, but Vietnams trade officials are under enormous pressure.

*Nguyen Minh Duc, a legal and public policy expert, works in the legal department of the Vietnam Chamber of Commerce and Industry. He earned a master's degree in economic policy management from Columbia University as a Fulbright scholar.