Latest news with #VietnamUS
South China Morning Post
07-07-2025
- Business
- South China Morning Post
Why Vietnam's US trade deal is a high-risk economic gamble
Just days before a sweeping 46 per cent US tariff on Vietnamese imports was set to take effect, Hanoi and Washington reached a surprise deal . Vietnam agreed to a tariff of 20 per cent on direct exports to the United States and 40 per cent on transshipped goods . In return for the reduced US tariffs, Vietnam grants zero-tariff access to American goods entering its market. Advertisement Presented as a pragmatic trade compromise, the deal's deeper significance lies in its geopolitical and structural dimensions. It underscores both Vietnam's urgency to safeguard US market access and a shifting – though still tentative – strategic alignment between Hanoi and Washington amid rising Chinese economic and military assertiveness. Vietnam has long benefited from preferential trade access to the US market, particularly during the first Trump term, when Chinese companies fleeing US tariffs relocated their manufacturing to Vietnam. But that advantage became a liability: last year, Vietnam's trade surplus with the US surged to US$123.5 billion – raising alarm in Washington over alleged transshipments and the back-door benefits to China. Back in office, US President Donald Trump has turned that imbalance into a political flashpoint. By agreeing to the tariffs, Vietnam has temporarily averted direct punitive measures. But in doing so, it has opened its market – completely and unconditionally – to US goods. Vietnam's decision to eliminate import duties on a broad swathe of American exports – from liquefied natural gas (LNG) and aircraft to semiconductors, pharmaceuticals, agriculture and even automobiles – represents a dramatic shift. For US exporters, it unlocks a US$100 billion consumer market in Southeast Asia with a rapidly expanding middle class. For Vietnamese producers, however, the competitive landscape just became significantly more challenging. Advertisement The impact is expected to be broad. In the LNG sector, with multiple terminals under development, Vietnam's energy diversification strategy could align with US suppliers such as Cheniere Energy, which are well-positioned to secure long-term contracts.
South China Morning Post
06-07-2025
- Business
- South China Morning Post
Vietnam's new US trade deal sparks optimism despite tariff challenges
Vietnam breathed a sigh of relief when US President Donald Trump announced a trade deal had been struck between Hanoi and Washington. The Vietnam Stock Index reached its highest level since April 2022, indicating confidence that export stability had been achieved. On the face of it, the deal is highly unbalanced, with US exports to Vietnam enjoying tariff-free market access, while Vietnamese exports in the other direction now face a 20 per cent rate, slightly over twice last year's average rate of 9.4 per cent. The rationale for the skewed maths, according to supporters of the Trump administration's 'America-first' trade policy, is that such measures are necessary to balance US-Vietnamese trade. Hanoi currently enjoys a surplus in excess of US$100 billion. Furthermore, the new rate is vastly lower than the 46 per cent that Trump unveiled in April against Vietnamese goods. Augustine Ha Ton Vinh, a Vietnamese-American businessman and economic development strategist in Hanoi who formerly worked in the Reagan administration, said that Vietnam could live with the new tariff rate. 'With the 20 per cent rate, it is the level that the Vietnamese economy can bear, but if the US imposes a tax rate of more than 25 per cent, the Vietnamese economy will be in crisis,' said Vinh, who campaigned for Trump last year. The new tariffs would be difficult but not insurmountable, said Ngo Minh Duc, founder of LCTV Financial Investment Joint Stock Company in Hanoi.
Malay Mail
03-07-2025
- Business
- Malay Mail
Vietnam avoids 46pc US tariff under new trade deal, but Beijing warns against targeting China
HANOI, July 3 — Vietnam's trade deal with the US averts the most punishing of Donald Trump's 'reciprocal' levies but has provoked new friction between Washington and Beijing. Vietnam has the third-biggest trade surplus with the US of any country after China and Mexico, and was targeted with one of the highest rates in the US president's 'Liberation Day' tariff blitz on April 2. The deal announced yesterday is the first full pact Trump has sealed with an Asian nation, and analysts say it may give a glimpse of the template Washington will use with other countries still scrambling for accords. The 46 per cent rate due to take effect next week has been averted, with Vietnam set to face a minimum 20 per cent tariff in return for opening its market to US products including cars. But a 40 per cent tariff will hit goods passing through the country to circumvent steeper trade barriers — a practice called 'transshipping'. Washington has accused Hanoi of relabelling Chinese goods to skirt its tariffs, but raw materials from the world's number two economy are the lifeblood of Vietnam's manufacturing industries. 'From a global perspective, perhaps the most interesting point is that this deal again seems in large part to be about China,' said Capital Economics. It said the terms on transshipment 'will be seen as a provocation in Beijing, particularly if similar conditions are included in any other deals agreed over coming days'. Beijing's foreign ministry spokeswoman Mao Ning said today 'negotiations and agreements should not target or harm the interests of third parties'. 'Wouldn't celebrate just yet' Shares in clothing companies and sport equipment manufacturers — which have a large footprint in Vietnam — rose on news of the deal in New York. But they later declined sharply as details were released. 'This is a much better outcome than a flat 46 per cent tariff, but I wouldn't celebrate just yet,' said Hanoi-based Dan Martin, from Asian business advisory firm Dezan Shira & Associates. 'Everything now depends on how the US decides to interpret and enforce the idea of transshipment,' he added. 'If the US takes a broader view and starts questioning products that use foreign parts, even when value is genuinely added in Vietnam, it could end up affecting a lot of companies that are playing by the rules.' A Vietnam foreign ministry spokesman told reporters today that negotiators were still 'in detailed discussion to concretise agreements'. But there are scant details about the transshipment arrangements in the deal, which Trump announced on his Truth Social platform. 'The announced deal gives Vietnam a level of certainty that most other US trading partners do not have,' said American Chamber of Commerce in Hanoi chief Adam Sitkoff. But, he said, 'assessing the pros and cons of the deal is difficult without seeing further details about what the tariffs actually mean'. 'The answers to these questions can be the difference between celebrating or crying.' 'The looming question' Bloomberg Economics forecast Vietnam could lose a quarter of its exports to the US in the medium term, endangering more than two per cent of its gross domestic product as a result of the agreement. 'The Vietnamese government will now find itself under pressure to ensure that country-of-origin rules are enforced,' explained Jack Sheehan, head of regional tax at Asian legal and tax firm DFDL. But uncertainty over how transshipping will be 'defined or enforced' is likely to have diplomatic repercussions, said Bloomberg Economics expert Rana Sajedi. 'The looming question now is how China will respond,' she said. 'Beijing has made clear that it would respond to deals that came at the expense of Chinese interests.' 'The decision to agree to a higher tariff on goods deemed to be 'transshipped' through Vietnam may fall in that category,' added Sajedi. 'Any retaliatory steps could have an outsized impact on Vietnam's economy.' — AFP
Bloomberg
02-07-2025
- Business
- Bloomberg
US Wants Vietnam to Pay Higher Tariff Based on Foreign Content
Vietnam and the US are said to be close to a trade framework that will see goods given a scaled range of tariffs depending on the percentage of foreign content, according to people familiar with the talks. Exports to the US that contain the highest proportion of foreign components would be charged at the top end of the range, around 20% or above, the people said, asking not to be identified as the talks are confidential. Products that contain a lower percentage of foreign components would be set a slightly reduced rate, while those entirely from Vietnam would face the lowest rate — potentially the existing universal 10% levy, the people said. The details continue to be discussed and could still change.
Free Malaysia Today
26-06-2025
- Business
- Free Malaysia Today
Vietnam's PM expects US trade deal before July tariff deadline
Vietnam's Prime Minister Pham Minh Chinh was part of a panel discussion at the World Economic Forum in China today. (AFP pic) HANOI : Vietnamese Prime Minister Pham Minh Chinh said today he expected a trade deal with the US before the expiration of a pause on 46% reciprocal tariffs on Vietnamese exports in early July. Speaking at the 'Is Asia's Century at Risk?' panel during the ongoing World Economic Forum in Tianjin, in northeastern China, Chinh said Vietnam's government was in frequent communication with the Trump administration on tariffs. 'I hope that you will see that the result will come earlier than two weeks,' Chinh said. 'Vietnam and the US share a deep understanding on tariffs… I hope that all the positive things will come for us.' Vietnam, a major manufacturing hub in Southeast Asia, has held several rounds of negotiations with the US, the latest of which concluded last week. The country seeks to avoid the reinstatement of a 46% tariff rate, initially imposed due to its substantial trade surplus with Washington. Reuters reported that the US submitted a list of trade demands to Hanoi, which Vietnamese officials described as 'tough', and was also pushing Vietnam to reduce the use of Chinese tech in devices that are assembled in the country before being exported to America. Vietnam's trade surplus with the US climbed to US$12.2 billion in May, marking a nearly 42% increase year-on-year and a 17% rise from April, according to government data. Exports to the US surged 42% from a year earlier to US$13.8 billion, hitting a post-pandemic peak. Under pressure from Washington, Hanoi has intensified efforts to curb illegal trans-shipment, predominantly involving goods from China. Additionally, Vietnam has expressed willingness to reduce non-tariff barriers and expand imports of US goods, including planes, agricultural products and energy, though no formal purchase agreements have been announced.
