Vietnam has cut tariffs on US imports while aiming for closer trade relations, responding to concerns over its trade surplus. This comes as the US prepares to impose reciprocal tariffs on trading partners with trade surpluses. Additionally, Vietnam has approved Starlink.
According to Reuters and Bloomberg, Vietnam has announced a series of tariff reductions aimed at addressing its substantial trade surplus with the US, which exceeded US$123 billion in 2024.
Among the planned changes, Vietnam will decrease the tariff on liquefied natural gas (LNG) from 5% to 2% and reduce automobile tariffs, which currently range from 45% to 64%, down to 32%. Additionally, the tariff on ethanol will be halved from 10% to 5%, while tariffs on ethane will be completely removed. Duties on other American imports, including chicken thighs, almonds, apples, cherries, and wooden products, will also see cuts. These changes are anticipated to take effect within the month.
In a related development, Vietnam has granted approval for SpaceX to trial its Starlink satellite internet service within the country. This move, which allows for full foreign ownership of local subsidiaries, is being interpreted as an attempt to foster closer ties with US businesses and possibly mitigate future tariff disputes.
Vietnam has faced scrutiny over its potential role as a transshipment point for Chinese goods destined for the US, raising concerns about the circumvention of US tariffs. To counter this issue, the government has implemented temporary anti-dumping duties on Chinese steel products and is actively working to combat illegal practices such as the relabeling of Chinese goods. Furthermore, Vietnam is considering tighter local content requirements to encourage Chinese companies to develop a supply chain within the country.
The commitment to strengthening bilateral trade ties is reflected in recent agreements in October 2024, with Vietnamese and US companies signing deals worth over US$4 billion in areas including aviation, oil and gas exploration, and petrochemical imports, reports Channel News Asia. These partnerships are expected to foster a more balanced trade relationship, with the potential to create hundreds of thousands of jobs across both nations.
Article edited by Jack Wu
