Vietnam Seeks New Trade Deals to Offset US Tariffs

Vietnam’s Prime Minister, Pham Minh Chinh, announced a strategic effort to pursue new trade agreements this year aimed at countering the financial repercussions of tariffs imposed by the United States, the country’s largest export market. This statement was made shortly after the United Nations Development Programme released estimates indicating that US tariffs could potentially reduce Vietnam’s exports to the US by as much as one-fifth, making it the most affected country in Southeast Asia.

During a press briefing on September 20, 2023, Chinh emphasized the anticipated challenges that Vietnamese exports will face, citing factors such as “strategic competition, conflicts, and the US’s ‘reciprocal’ tariff policies.” Despite these challenges, he expressed optimism, projecting a growth rate of over 12 percent for exports in 2023. Government data shows that exports from Vietnam increased by 15.8 percent year-on-year, reaching $325.3 billion by September 15, 2023.

Strategic Partnerships on the Horizon

To mitigate the impact of US tariffs, Chinh highlighted Vietnam’s goal to finalize free trade agreements with the Mercosur trading bloc in Latin America and the Gulf Cooperation Council countries by the end of 2023. These agreements are seen as crucial for expanding Vietnam’s trade networks and diversifying its export markets.

Negotiations with the United States are also set to continue, particularly after the Trump administration implemented a 20 percent tariff on a majority of Vietnamese goods. This move has raised significant concerns for Vietnam, prompting officials to take action to bolster their trade relations with the US.

Addressing Import Concerns

In addition to pursuing new trade deals, Chinh instructed government officials to strengthen enforcement against imported goods that may violate international copyright laws or have questionable origins. These issues have been consistently flagged by US officials as significant obstacles to improving bilateral relations.

The White House has also introduced a 40 percent tariff on products identified as being transshipped through Vietnam, which poses a considerable risk if the US decides to implement strict regulations on foreign components in exported goods. Given that a large portion of Vietnam’s exports relies on Chinese components, such measures could have widespread ramifications.

As Vietnam navigates the complexities of international trade amid evolving global dynamics, the government’s proactive approach aims to safeguard the nation’s economic interests and foster robust trade relationships.