Vietnam Proposes Zero Tariffs on U.S. Imports Amid 46% Tariff Threat

Vietnam has proposed the elimination of all tariffs on imports from the United States, a move that comes amidst escalating trade tensions and economic challenges. This proposal follows a series of tariff impositions by the U.S. administration, which has significantly impacted Vietnam's export-driven economy. The U.S. had previously announced a 46 percent tariff on all Vietnamese imports, effective from April 9, 2025. This tariff was part of a broader strategy by the U.S. to address what it perceives as unfair trade practices and to reduce its trade deficit with Vietnam.

Vietnam's proposal to eliminate tariffs on U.S. goods is a strategic maneuver aimed at mitigating the impact of the U.S. tariffs and fostering a more balanced trade relationship. The move is also seen as a way to pave the way for negotiations that could lead to a mutually beneficial trade agreement. Deputy Prime Minister Bui Thanh Son and Party chief To Lam have both expressed Vietnam's willingness to negotiate with the U.S. to reduce import tariffs on U.S. goods to zero. This proposal comes at a time when Vietnam's economy is facing challenges, including a slowing growth rate, which was highlighted in government figures released on Sunday.

The U.S. tariffs, which include a 25 percent tariff on steel and aluminum imports and a 25 percent tariff on automobile imports, have already had a significant impact on Vietnam's key export sectors. Industries such as textiles, footwear, and furniture, which have traditionally benefited from Vietnam's reputation as a low-cost manufacturing hub, are particularly vulnerable to the tariff hikes. These sectors have seen steady growth over the past two decades, but the new tariffs threaten to strain profit margins, reduce order volumes, and potentially lead to job losses.

Vietnamese exporters may attempt to diversify their markets by targeting consumers in Europe, Asia, or the Middle East. However, this transition will likely be challenging due to logistical constraints and regulatory differences. Additionally, few markets offer the same scale of demand as the U.S., limiting the potential to offset the losses. Despite these challenges, there is speculation that the tariff hike may not be permanent. It is possible that the U.S. is using the high reciprocal tariffs as a negotiating tactic to pressure Vietnam into a new trade arrangement. If Vietnam were to reduce its trade surplus with the U.S. or agree to purchase more American goods, a deal could be struck that would lead to the rollback or reduction of the tariff.

The U.S. has cited Vietnam's trade surplus with the U.S. as a justification for the tariffs. In 2024, Vietnam's trade surplus with the U.S. reached a record high of $123.5 billion, making it the U.S.'s sixth-largest source of imports. The U.S. has also accused Vietnam of undervaluing its currency to achieve an economic advantage, although this dispute was later resolved under the Biden administration. The U.S. has also launched investigations into Vietnam's import and use of timber, claiming that Vietnam may be using illegally harvested or traded timber as inputs for its manufacturing of products that are exported to the U.S.

Vietnam's proposal to eliminate tariffs on U.S. goods is a significant step towards addressing these trade tensions and fostering a more balanced trade relationship. However, the success of this proposal will depend on the outcome of negotiations between the two countries. If a mutually beneficial trade agreement can be reached, it could lead to a reduction or elimination of the U.S. tariffs and a more stable trade relationship between the two countries.