Why did the US impose new tariffs on Vietnam?
On April 2, 2025, US President Donald Trump announced a new tariff policy, applying a basic tax rate of 10% on all imported goods from countries from April 5 and different reciprocal tax rates for each trading partner from April 9. Vietnam will be subject to a tax rate of 46% on goods exported to the US.
Affected industries in Vietnam
The countries affected are mainly partners with trade surpluses with the US, in which the Asian region will be heavily impacted with the highest tax rates. Specifically:
The imposition of symmetrical tariffs has a strong impact on five major export sectors of Vietnam, accounting for 64.3% of Vietnam's total export turnover to the US. The heavily affected sectors include electronics (computers, phones and components), textiles, footwear, wood, agriculture and aquaculture, steel and aluminum. Specifically, electronic and textile products will be subject to the highest tariffs, putting pressure on Vietnam's export profits and market share.
Reasons for US tax increase and political-economic consequences
President Trump’s new tax policy could have many impacts not only on countries but also on the US economy. One of the reasons Mr. Trump gave for imposing tariffs is to reduce the US trade deficit and restore domestic production. Accordingly, countries with large trade surpluses with the US will have to balance trade to reduce tariffs.
The US wants to protect domestic production.
The US administration hopes that this tariff policy will promote the shift of production back to the US, creating jobs for American workers and improving the economic position of the country. However, this can disrupt international supply chains, impact global production and cause shortages of raw materials and components, increasing costs for US companies and their partners.
Impact on other countries
Countries such as China, Japan, and the European Union have strongly opposed the new US tariff policy. China believes that this decision violates international trade rules and could increase trade tensions. Japan is concerned that the tariffs will make it difficult for companies to invest in the US, while the European Union has criticized this policy.
Impact on the global economy
The new US tax policy will not only affect direct trading partners but may also impact the global economy. Experts warn that the tax increase will lead to an increase in the cost of goods, reduce consumption and negatively affect global economic growth. In particular, developing countries will be greatly affected by losing export markets and facing economic crisis.
The impact of US tax increases andflexible responses
After the new US tax policy was announced, US stock futures fell as much as 3%; Apple shares fell as much as 7.9% on April 3; Amazon shares fell 6% and Tesla shares fell 8% in after-hours trading; oil prices fell more than $2/barrel and bitcoin fell 4.4%.
Asian stock markets fell sharply across the board on April 3, 2025. The sell-off was widespread, causing major indexes of stock markets in the Asian region to plummet.
The United States is currently the second largest trading partner, the number 1 export surplus market and one of the most important export markets, one of the leading investment partners of Vietnam and is gradually becoming a source of supply for machinery, equipment, science and technology, energy products, creating a strong driving force for Vietnam's economic development. Vietnam-US bilateral trade turnover in 2024 reached nearly 150 billion USD, an increase of 20.5% over the same period last year and a trade surplus of 123.5 billion USD.
The US tax policy is expected to have a major impact on five main industries that account for 64.3% of Vietnam's total export turnover to the US in 2024, namely electronics (computers, electronic products and components; phones of all kinds and components; cameras, camcorders and components) accounting for 28.6% of total export turnover to the US; Textiles, footwear accounting for 21.9%; Wood and wood products accounting for 7.6%; Agriculture, aquaculture and seafood accounting for 3.5%; Steel and aluminum accounting for 2.7%.
Specifically, computers - components (23.2 billion USD), machinery - equipment (22 billion USD) and textiles (16.2 billion USD); phones, wood, and footwear also contributed greatly with turnover from 8.3 - 9.8 billion USD. Cashew nut exports reached 1.15 billion USD, seafood 1.83 billion USD and coffee 323 million USD. It is forecasted that Vietnam's seafood exports to the US in 2025 could reach more than 2 billion USD, an increase of 10-12% over the previous year. With a tax rate of 46%, Vietnamese seafood products entering the US may have to pay an additional amount of 0.92 billion USD in 2025.
The fact that Vietnam is subject to a high symmetrical tax rate of up to 46% for 90% of the total value of exports to the US is causing great pressure and concern for the Vietnamese export community (especially for key export industries such as electronics, textiles - footwear, wooden furniture and interior, seafood) about the possibility of reduced profits, narrowing of export orders and market share, as well as disruptions to the supply chain and increased inventories, when US partners can find alternative sources of goods from countries that are not subject to high taxes. High tax rates may cause FDI enterprises (especially from the US, China, South Korea) to reconsider their investment strategies in Vietnam...
According to Bloomberg forecast, the new US tax policy mentioned above will reduce Vietnam's GDP by a total of about 8.9% by 2030, or an average of 1.5 - 2% per year, from the expected increase of 7-8% GDP in 2025 to about 5 - 6.5% GDP or lower.
In addition, the reduction in exports to the US may put pressure on the trade surplus, reduce foreign currency export revenue and increase pressure on exchange rates, employment, income and social security in the near future... This depends on the ability to negotiate, stimulate domestic consumption and public investment, and the ability of the Government and businesses to respond flexibly and effectively to policies and market reactions.
Immediately after the US announced its new tax policy, the Government Standing Committee met with ministries, departments and branches to assess the situation and discuss immediate solutions. The Prime Minister requested the immediate establishment of a rapid response team to listen to opinions from export enterprises, proactively respond to minimize impacts and promote economic restructuring towards sustainability, innovation, promote localization and expansion of global supply chains, and firmly maintain the GDP growth target of 8% or more by 2025.
On the evening of April 4, General Secretary To Lam had a phone call with US President Donald J. Trump about Vietnam-US relations. The two leaders assessed that the relationship between the two countries is developing well in all fields.
Regarding bilateral trade relations, the two leaders discussed measures to continue promoting trade, in which General Secretary To Lam affirmed that Vietnam is ready to negotiate with the US to reduce import tax to 0% for goods imported from the US, and at the same time proposed that the US apply similar tax rates to goods imported from Vietnam, continue to import more goods from the US that Vietnam needs and encourage, creating favorable conditions for companies from the US to further increase investment in Vietnam.
The US tariff policy is creating many major challenges for exporting countries, especially Vietnam. However, with reasonable countermeasures and a sustainable economic development strategy, Vietnam can minimize the negative impacts and continue to maintain a stable trade relationship with the US. Although this policy creates difficulties, it is also an opportunity for Vietnamese businesses and the Government to restructure the economy, respond flexibly, improve competitiveness and seek new markets in the context of globalization.
