U.S. PROPOSES 46% TARIFF ON VIETNAMESE IMPORTS – ENTERPRISES URGED TO PREPARE RESPONSE PLANS

In the early hours of April 3, 2025 (Vietnam time), U.S. President Donald Trump announced a proposed 46% retaliatory tariff on approximately 90% of imports from Vietnam. This marks the second-highest tariff rate among countries exporting to the U.S., following Cambodia’s 49% tariff on 97% of its goods.

According to the U.S. government, Vietnam's significant trade surplus with the United States is a key reason why the country has been subjected to a high retaliatory tariff—an approach similar to what the U.S. previously applied to China. The U.S. has adopted a formula for calculating retaliatory tariffs based on the ratio of its trade deficit with a specific country to that country's total exports to the U.S., with the applied tariff rate being roughly half of that ratio.

As per U.S. data, Vietnam exported goods worth USD 136.6 billion to the U.S., while importing only USD 13.1 billion in goods from the U.S. This results in a U.S. trade deficit of USD 123.5 billion with Vietnam, equivalent to approximately 90% of Vietnam’s total exports to the U.S. Based on the formula, the tariff rate would be around 45%; however, the U.S. chose to impose a slightly higher rate of 46%, signaling a firmer stance in its trade policy.

Negotiations remain open until April 9, 2025, but Vietnamese businesses should prepare for various tariff scenarios.

1. Potential Impact on Vietnam’s Economy

The U.S. is currently Vietnam’s largest export market, accounting for over 25% of total export turnover. In 2024, two-way trade reached USD 149.7 billion, with Vietnam enjoying a trade surplus of USD 123.5 billion.

A 46% tariff could lead to:

A decline in the competitiveness of Vietnamese goods in the U.S.
Reduced orders and revenue losses for exporters
Higher production costs.
Increased pressure on inflation and exchange rates.
Greater volatility in financial and currency market.

2. Key Export Sectors at Risk

The following five sectors, which together accounted for over 64% of Vietnam’s total exports to the U.S. in 2024, are expected to be most affected:

Sector	Share	Risk Level
Electronics & Components	28.6%	Moderate impact; largely FDI-driven; potential negative sentiment on future semiconductor investments.
Textiles, Garments & Footwear	21.9%	High impact; highly price-sensitive; easily relocated supply chains.
Wood & Wood Products	7.6%	Moderate impact; durable goods with high price sensitivity during economic downturns.
Agriculture, Seafood	3.5%	Significant impact; projected 2025 exports of USD 2.7–2.8 billion may face ~USD 1.28 billion in tariffs.
Steel & Aluminum	2.7%	Direct impact, particularly on aluminum exports.

3. W&A Recommendations for Exporters

W&A recommends that Vietnamese exporters take proactive and strategic measures in response to this proposed tariff escalation:

Closely monitor policy developments through government authorities, overseas trade offices, embassies, importers, and international trade organizations.
Build contingency scenarios based on varying tariff levels, reassess pricing and cost structures.
Diversify export markets and supply chains, leveraging Vietnam’s existing free trade agreements (FTAs), including EVFTA, CPTPP, and RCEP.
Embrace circular business models and digital transformation to optimize input costs and reduce dependency on traditional supply routes.
Engage in government dialogues and industry associations to advocate for balanced trade approaches with the U.S., including the possibility of a bilateral FTA or increased imports from the U.S.

W&A’s View

The proposed 46% tariff by the U.S. represents a systemic risk to Vietnamese exporters. This is not merely a trade issue—it poses a strategic challenge to Vietnam’s current positioning within global value chains. A retaliatory tariff at this scale could significantly strain the domestic economy and the competitiveness of Vietnamese businesses.

Nevertheless, with proactive policy responses from the Government and timely, strategic action from enterprises, Vietnam can identify viable pathways to adapt and grow in the evolving trade landscape. Key solutions include diversifying export markets, strengthening supply chain resilience, and enhancing international trade negotiations.