Vietnam Scrambles in a Tariff Bind

Of all the major economies hit by the Trump administration’s tariff bonanza, Vietnam may be the most exposed and least equipped to respond. Despite having one of the largest trade surpluses with the United States, Vietnam lacks the wealth of Japan, the strategic alliances of European nations, and the global influence of China. Hit with approximately 46 percent in new duties, Vietnam has limited options to protect its export-driven economy. Meanwhile, its Southeast Asian neighbors, rather than uniting like many European states, are also scrambling to appease the White House with concessions and flattery, eager to maintain access to the U.S. market.

Before the tariff barrage, some experts—including myself—believed that Vietnam might avoid severe penalties by offering modest concessions, given its strategic importance should the United States face conflict with China in the region. Vietnamese officials promoted this narrative, and even before last week’s tariffs were imposed, the country had pledged to increase purchases of U.S. goods—including American-made aircraft and agricultural products—and had already reduced tariffs on several Vietnamese exports.

It was not enough. The White House somehow concluded that Vietnam imposes 90 percent tariffs, even though the World Trade Organization estimates Vietnam’s average trade-weighted tariff at around 5 percent—a puzzling discrepancy of 85 percentage points. This came despite multiple U.S. administrations quietly encouraging American multinationals to shift production from China to countries like Vietnam to reduce dependency on Beijing. Nevertheless, Hanoi was hit with a 46 percent duty.

Given that Vietnam’s prior concessions and its outreach to Trump officials emphasizing its strategic importance failed to avert the tariffs, Hanoi was left with few options. The opaque and highly authoritarian Communist Party of Vietnam is deeply averse to showing weakness—especially under its current General Secretary, To Lam, a hardliner who rose through the security services. 

Yet To Lam took the only path truly available to him. He called Trump and had a talk that the U.S. president said was “very productive.” On Truth Social, his social media platform, Trump went further, writing, “Just had a very productive call with To Lam, General Secretary of the Communist Party of Vietnam, who told me that Vietnam wants to cut their Tariffs down to ZERO if they are able to make an agreement with the United States.”

By last Friday, Vietnamese officials were signaling that To Lam and Trump would meet soon, that Vietnam would remove all duties on U.S. imports, and that they hoped the United States would reciprocate—though Trump has made no such promise. Both countries have agreed to work toward a bilateral agreement that could reopen trade, but with the current U.S. president, a meeting does not guarantee a commitment, especially on tariffs. Vietnam may still have much more to do to escape the White House’s tariff crosshairs.