​Vietnam's Deputy PM Ho Duc Phoc to visit US amid looming 46% tariff

​Vietnam's Deputy PM Ho Duc Phoc to visit US amid looming 46% tariff

Vietnam's Deputy Prime Minister Ho Duc Phoc is scheduled to depart for a business trip to the U.S. on Sunday, following the U.S. administration’s announcement of a reciprocal 46-percent tariff on imports from Vietnam.

Vietnamese Deputy Prime Minister Ho Duc Phoc, who will make an overseas trip from April 6 to 14, for a business trip to the U.S. and an official visit to Cuba. Photo: Vietnam Government Portal

This tariff is part of a new wave of global duties announced on Thursday, which has caused significant concerns among Vietnam's business community and economic experts.

The U.S. government's decision to levy a 46-percent tariff on Vietnamese goods places Vietnam among the nations facing the highest tariff rates, surpassing those imposed on Vietnam’s competitors in the U.S. market like Thailand (36 percent), Pakistan (29 percent), and the Philippines (17 percent).

Vietnam is also subject to a much higher rate than that of Bangladesh (37 percent), China (34 percent), Indonesia (32 percent), India (26 percent), Malaysia and Japan (both 24 percent), and the EU (20 percent).

According to a White House statement released Wednesday, President Trump will impose a 10-percent tariff on all countries starting April 5, except for those with the largest trade deficits with the U.S. Instead, these countries will face individually assessed higher reciprocal tariffs, which will take effect on April 9.

This substantial tariff is anticipated to adversely affect key Vietnamese export sectors, including electronics, textiles, footwear, furniture, seafood, and cashew nuts, by diminishing their competitiveness in the U.S. market, according to economic experts.

In response to this situation, the business community hopes that the upcoming trip to the U.S. by Deputy PM Phoc will lead to negotiations between Vietnam and the U.S. aimed at reaching a balanced agreement to mitigate damage to businesses in the current challenging context.

As scheduled, during his April 6-14 overseas trip, Phoc will attend a high-level policy dialogue at Columbia University in New York as part of his business trip to the U.S., before proceeding to an official visit to Cuba.

According to a source from Tuoi Tre (Youth) newspaper, relevant parties are preparing for Deputy PM Phoc's visit.

Deputy PM Phoc is currently assigned by PM Pham Minh Chinh to oversee and direct the Ministry of Finance, the State Bank of Vietnam, the Vietnam Bank for Social Policies, the Vietnam Development Bank, and deposit insurance.

On behalf of the PM, Phoc also governs areas such as investment planning, macroeconomic forecasting and policies, finance, pricing, monetary matters, banking, capital markets, stock exchanges, financial investment sources, and state reserves, among others.

In a brief exchange with Tuoi Tre on Thursday morning, Prof. Dr. Vu Minh Khuong from the Lee Kuan Yew School of Public Policy at the National University of Singapore commented that the 46-percent tariff imposed by the U.S. will not only affect Vietnam's export sectors but also significantly impact its foreign direct investment attraction.

Further, the new tariff will take effect from April 9, leaving the Vietnamese government little time to address the situation and mitigate its impact.​

Dr. Khuong outlined three key solutions to address the situation. Firstly, Vietnam should promptly negotiate with the U.S. to grant American imports preferential policies, potentially treating the U.S. as a free trade agreement (FTA) partner.

Drawing from Singapore's experience with the U.S.-Singapore FTA since 2004, such an approach could reduce U.S. tariffs on Vietnamese exports to 10 percent, the same rate applied to Singapore.

Secondly, Vietnamese authorities should collaborate with exporters to implement reforms focused on increasing the added value of products, rather than merely boosting export volumes. This involves improving the business environment, supporting all industries, raising labor productivity, and fostering innovation.

Lastly, as a long-term strategy, Vietnam needs to broaden its international cooperation to reduce dependence on a number of major markets.

Tuoi Tre News