Việt Nam eyes backup plans as US tariff threat looms

Việt Nam eyes backup plans as US tariff threat looms

Over the longer term, Việt Nam must consider diversifying export markets, especially those with free trade agreements already in place. Markets in East Asia and the European Union offer viable alternatives based on demand and trade volume.

Harvesting dragon fruit in Bình Thuận Province. — VNA/VNS Photo

The Ministry of Agriculture and Environment is drawing up contingency plans if efforts to negotiate a tariff reduction with the United States fall through, Minister Đỗ Đức Duy has said.

While tariff negotiations remain the preferred outcome, the minister stressed the need to anticipate less favourable scenarios following the announcement by US President Donald Trump on April 3 of sweeping retaliatory tariffs, potentially including a 46 per cent rate on goods from Việt Nam.

The Government and the ministry acted swiftly after President Trump’s announcement, Duy said, addressing ministry units, major exporters and industry associations on Monday. 

“Việt Nam remains hopeful for a negotiated reduction. But we must be prepared for the possibility that the United States enforces this policy without delay," he said.

The minister urged all stakeholders to jointly assess the situation and propose policy responses, including potential Government support packages. 

“Support could come in the form of tax relief, access to credit, or targeted financial mechanisms,” he added.

One immediate response, proposed by the Department of Quality, Processing and Market Development, is to expedite all shipments to the US before April 9, the expected date the new tariff regime will take effect.

According to Department Director Ngô Hồng Phong, Việt Nam’s exports of agricultural, forestry and fishery products to the US have consistently exceeded US$13 billion annually in recent years, with a trade surplus of more than $10 billion. 

In 2024, exports reached $14.31 billion, up 25 per cent from 2023, while imports from the US stood at $3.44 billion.

In the first quarter of 2025, Việt Nam recorded $3.21 billion in agricultural exports to the US, up 14.9 per cent year-on-year. Imports totalled $914 million, a 7.1 per cent increase. 

Key export categories included wood and wood products, seafood, pepper, cashew nuts, coffee and fresh produce.

Phong warned that even a 10 per cent flat tariff on all imports would disrupt the bilateral trade balance and weigh heavily on the agricultural sector’s performance in 2025.

Though a 46 per cent retaliatory tariff has been floated, actual rates may vary by product group, prompting urgent calls for a detailed sector-by-sector impact assessment.

In the short term, Phong called for close coordination between ministries, businesses and logistics providers to fast-track customs clearance and delivery of goods. 

He also encouraged exporters to engage proactively with US importers to address existing contracts and consider how to distribute any tariff burden fairly.

Equally important, he said, would be reinforcing traceability standards to ensure Vietnamese products are not mischaracterised as re-routed Chinese goods, an issue likely to draw scrutiny from US customs authorities.

Phong said that having a clear and verifiable origin was essential to making the case for exemptions or reduced tariffs on specific product groups.

Over the longer term, Việt Nam must consider diversifying export markets, especially those with free trade agreements already in place. Markets in East Asia and the European Union offer viable alternatives based on demand and trade volume.

The department has outlined strategic market redirections for each product group, with wood and wood products targeted at Japan, China and the EU; seafood at China, Japan, the EU and South Korea; cashew nuts at the EU, China, the UAE and the United Kingdom; pepper at the EU, the UAE, India and China; fruits and vegetables at China, South Korea, the EU and ASEAN; and coffee at Germany, Italy and Japan. 

Bizhub