Vietnam this week made quite a lot of preemptive bilateral commerce concessions to the USA in a bid to keep away from the imposition of tariffs by the Trump administration subsequent week.
In line with a report by Reuters that cited a press release launched by the Ministry of Finance on Tuesday evening, the tariff on U.S. liquefied pure gasoline (LNG) will probably be lowered from 5 p.c to 2 p.c. Duties on automobiles will probably be lowered to 32 p.c, down from a spread of 45 to 64 p.c, whereas the tariff on ethanol will probably be halved from 10 p.c to five p.c.
Within the assertion, Nguyen Quoc Hung, the pinnacle of the Finance Ministry’s tax coverage division, mentioned that the tariff cuts are aimed toward “bettering commerce balances with [Vietnam’s] commerce companions” and can help Vietnam “navigate the advanced and unpredictable developments within the world geopolitical and financial state of affairs.”
Hung mentioned the decree on the tariff cuts “will probably be prepared inside this month and can take impact proper after that,” Reuters reported. He added that Vietnam additionally plans to take away its tariff on American ethane, and that tariffs can even be slashed on a spread of different “imports together with hen thighs, almonds, apples, cherries, and wood merchandise.”
Whereas Vietnam and the U.S. have turn into nearer companions, partly on account of shared considerations about China’s rising energy, the nation might come below scrutiny by the Trump administration for its huge commerce surplus with the U.S. This grew by nearly a fifth in 2024, hitting a file excessive of $123.5 billion. Vietnam now has the third-largest trade surplus with the U.S. of any nation, behind solely China and Mexico – each of which have been hit with tariffs since Trump’s second time period started in January. Particularly, there are fears that the administration might punish Vietnam in mild of stories that Chinese language companies have arrange factories in Vietnam particularly to keep away from tariffs on items from China.
The administration is set to announce a raft of reciprocal tariffs on April 2, which Trump has declared “liberation day.” This follows a complete overview by the Commerce and Treasury departments, together with analyses of persistent U.S. commerce deficits and what is perhaps performed to treatment them.
Given the clearly lopsided nature of the U.S.-Vietnam commerce relationship, which additionally attracted consideration throughout Trump’s first time period, Hanoi has been proactive at making ready for doable consideration from Washington. Earlier this month, Vietnam’s Minister of Commerce Nguyen Hong Dien led a big delegation to Washington, the place representatives of main Vietnamese companies signed a sequence of economic offers with U.S. corporations worth more than $4 billion. These included an MoU between PetroVietnam to purchase GE tools to assist equip Vietnam’s raft of deliberate LNG-fired energy vegetation, the primary two of that are scheduled to begin business energy technology in June. Though Vietnam is just not at present importing American LNG, it’s proposing that it’ll use imports from the U.S. to produce these vegetation.
Even earlier than Trump took workplace, Vietnamese officers “have quietly been advocating to U.S. officers and safety consultants concerning the significance of the bilateral strategic relationship,” Joshua Kurlantzick of the Council on Overseas Relations noted recently. On this context, this week’s concessions are supposed as a token of fine religion that Hanoi hopes will see it keep away from the worst of Trump’s wrath.
In a presumably associated transfer yesterday, the Vietnamese authorities announced that it had allowed Elon Musk’s SpaceX to launch its Starlink satellite tv for pc web service on a trial foundation. The trial interval, which can run till 2030, will permit SpaceX to enroll a restrict of 600,000 clients for the satellite tv for pc web service. Talks between SpaceX and the Vietnamese authorities reportedly ran aground in late 2024 over Hanoi’s reluctance to ease the principles on international possession of telecom companies with community infrastructure.
Whether or not or not Vietnam’s preemptive concessions to Trump and Musk make any distinction to how it’s handled by the Trump administration stays to be seen. However given the dawning strategic relationship between the U.S. and Vietnam, the nation can actually make a superb case for being exempted from the worst punishments of Trump’s “day of liberation.”
