US imposes 46 per cent tax on goods imported from Việt Nam

US imposes 46 per cent tax on goods imported from Việt Nam

US President Donald Trump has announced a 46 per cent reciprocal tariff on 90 per cent of total goods imported from Việt Nam, the second highest among all exporting countries to the US.

Garment production at the Hòa Thọ Textile and Garment JSC’s factory in Quảng Trị Province. Major industries, including textiles, footwear, furniture, electronic components and seafood, will be significantly impacted if the 46 per cent tariff is implemented.— VNA/VNS Photo Danh Lam

US President Trump has announced that a base tariff rate of 10 per cent will be imposed on all imports into the US, while tariffs on countries with large trade surpluses will be significantly increased.

This figure is second only to Cambodia, which will be subject to a 49 per cent tariff.

China would be hit with a 34 per cent tariff, the European Union with 20 per cent, India with 26 per cent and Japan with 24 per cent.

Elsewhere in Southeast Asia, Thailand will be subject to a 36 per cent tariff, followed by Indonesia with 32 per cent, Malaysia with 24 per cent, the Philippines with 17 per cent and Singapore with 10 per cent.

Việt Nam is one of the US’s key trade partners, with its exports to the market reaching around US$124 billion in 2023. Major industries, including textiles, footwear, furniture, electronic components and seafood, will be significantly impacted if the 46 per cent tariff is implemented.

The US is the largest market for Vietnamese textiles, accounting for nearly 50 per cent of the industry's total export revenue. Companies including Vinatex, May 10 and TNG could struggle as higher costs lead to reduced orders and weaker purchasing power from US partners.

The tech sector could also be hit hard. Apple, the world’s largest technology company, has relocated part of its production from China to Việt Nam to avoid US tariffs. However, with Việt Nam now facing a 46 per cent tariff, suppliers including Foxconn, Luxshare and Pegatron will experience significantly higher costs.

“If this tariff is implemented, Apple and other tech firms will need to reassess their manufacturing strategies. Shifting production from China to Việt Nam to avoid tariffs may no longer be an optimal solution,” Dan Ives, an analyst at Wedbush Securities, warned.

This means many multinational companies may seek alternative manufacturing locations such as India or Mexico, potentially diminishing Việt Nam’s attractiveness for foreign direct investment (FDI).

According to a White House statement, the 10 per cent tariff on all nations will take effect on April 5. For countries subject to higher tariffs based on trade deficits with the US, the new rates will be enforced starting April 9.

This gives Vietnamese exporters less than a week to prepare for the worst-case scenario.

Some experts suggest intensifying bilateral negotiations with the US, urging the Government to work with Washington to seek exemptions or tariff reductions for certain strategic products.

Việt Nam should also accelerate market diversification to reduce reliance on the US by expanding exports to Europe, Japan, South Korea and the Middle East.

Attracting investment in domestic manufacturing is a crucial solution, encouraging US firms to invest directly in Việt Nam.

Furthermore, providing domestic businesses with financial and tax policy support will help them cope with the effects of US trade policies.

Vietnamese exporters are facing a challenging period, requiring rapid adaptation to survive and grow. 

Bizhub