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Thiên Lương and Hiếu Mạnh wrote this article in Vietnamese, originally published in Luật Khoa Magazine on July 1, 2025. Đàm Vĩnh Hằng translated it into English for The Vietnamese Magazine.

Vietnam Struggles in Ongoing Tariff Talks with the U.S. Việt Nam has been locked in high-stakes tariff negotiations with the United States. After three rounds of talks, the most recent concluding on June 12, the country faces a potential 46% tariff on nearly 90% of its exports to the U.S. if a deal is not reached when a 90-day deferral period ends on July 7. While state media reports describe “significant progress,” key challenges remain unresolved.

The crisis began with a sweeping executive order signed by U.S. President Donald Trump on April 2, imposing retaliatory tariffs on countries with large trade surpluses. According to Bloomberg , Việt Nam seeks to lower the tariffs to a 20–25% range, but Washington has set stringent conditions. Reuters reports that these demands call on Việt Nam to reduce its economic dependence on China, a politically and economically complex task.

The pressure forced Hà Nội into an immediate diplomatic scramble. Prime Minister Phạm Minh Chính convened an emergency cabinet meeting, and the Ministry of Industry and Trade sent a formal note to Washington requesting a postponement. This culminated in a rare teleconference on April 4 between General Secretary Tô Lâm and President Trump, during which Tô Lâm offered to reduce tariffs on U.S. goods as a goodwill gesture.

The Trump administration agreed to a temporary compromise: a 90-day window from April 7 to July 7, where tariffs would be reduced to 10% pending the outcome of the talks. However, the proposal faced stiff opposition from Peter Navarro, a senior trade advisor to President Trump. As reported by Newsweek, Navarro accused Việt Nam of “rampant trade fraud,” alleging it was acting as a conduit for Chinese goods to bypass U.S. tariffs, which are as high as 145% on certain products.

Adding another layer of complexity, Chinese President Xi Jinping officially visited Hà Nội on April 14. During the trip, the two countries “ elevated their strategic partnership ” and signed new bilateral trade agreements, deepening Việt Nam’s economic ties with Beijing at an extremely sensitive moment in its trade relations with Washington.

President Donald Trump signs an executive order imposing reciprocal tariffs. Photo source: The Guardian. Vietnam-U.S. Trade Deficit Hits Record Low at $123.4 Billion The Trump administration has justified its actions by pointing to a rapidly ballooning trade deficit with Việt Nam. Statistics from the U.S. Department of Commerce indicate that Việt Nam’s surplus of goods with the U.S. surged by over 300% in just six years, jumping from $39.5 billion in 2018 to $123.4 billion in 2024. The trend showed no sign of slowing in the first quarter of 2025, with the U.S. posting another $50.08 billion deficit.

Year

U.S. Exports to Vietnam (USD bn)

Vietnam Exports to U.S. (USD bn)

Trade Deficit (USD bn)

2018

9.7

49.1

-39.5

2019

9.9

79.6

-69.6

2020

9.9

79.6

-69.7

2021

11.0

101.9

-90.9

2022

11.4

127.5

-116.1

2023

9.8

114.4

-104.6

2024

13.1

136.5

-123.4

Table: Trade statistics from the U.S. Census Bureau show that America’s trade deficit with Vietnam has more than tripled in six years.

Building on this, the U.S. government released data on April 2 claiming that Việt Nam imposes an average tariff of 5.1% on American imports—a rate higher than both China’s (3%) and the European Union’s (2.7%). The administration has further accused Hà Nội of imposing tariffs as high as 90% on certain U.S. goods. These accusations followed an expanded investigation into alleged tariff manipulation ordered by President Donald Trump shortly after he returned to office on January 20.

The Vietnamese government has firmly rejected the claim of 90% tariffs, stating that the country’s actual average MFN (Most Favored Nation) tariff on American products is 9.4%, a figure that is in line with international trade norms.

Rebranded Chinese Goods Fuel Tensions with U.S. The current trade dispute's roots trace back to 2018, when President Donald Trump’s administration launched a sweeping trade war against China, imposing tariffs on $50 billion worth of Chinese imports. This move forced multinational corporations in China to seek alternative manufacturing hubs to avoid surging supply chain costs. At the same time, Chinese domestic firms looked for transit countries to reroute exports and circumvent U.S. tariffs.

Việt Nam quickly emerged as one of the most attractive destinations in the so-called “China +1” model, becoming a key hub for this activity. The most common tactic was simple relabeling: goods marked “Made in China” were rebranded as “Made in Vietnam” before being exported to the U.S., particularly for products like wood, steel, solar panels, electronics, and textiles.

Cargo containers at Nansha Port in Guangzhou Province, China. Photo source: The Guardian. Some companies practiced “minimal transformation,” performing only basic final assembly or packaging inside Việt Nam. According to Reuters , Chinese ships were even reported to have waited for extended periods in Vietnamese ports just to obtain fake certificates of origin. More alarmingly, “origin washing” services reportedly emerged within Việt Nam, specializing in systematically altering the declared origin of goods—an issue covered by over 50 international news outlets , including an article by Breitbart.

This type of tariff circumvention appears to be part of a broader pattern of regional trade fraud. In the first quarter of 2025, for example, South Korean authorities seized over $20.1 million worth of counterfeit “Made in Korea” goods, 95% of which were intended for export to the U.S.

Việt Nam’s Diplomatic Push to De-escalate Facing the looming threat of a 46% retaliatory tariff, Việt Nam launched a multi-pronged diplomatic effort to de-escalate tensions with the United States.

On May 16, a government delegation led by Minister of Industry and Trade Nguyễn Hồng Diên held face-to-face meetings with U.S. officials in Washington to accelerate trade negotiations. In a significant move to reduce the trade imbalance, Hà Nội agreed to import $3 billion worth of American agricultural products. Furthermore, it announced Most Favored Nation (MFN) tariff reductions on 13 high-value U.S. exports, including cars, timber, and liquefied natural gas (LNG), a move expected to reduce state revenue by approximately 220 billion đồng (about $8.81 million).

Vietnamese Government delegation visits the US for tariff negotiations. Photo source: Dan Tri. Tougher Enforcement at Home In parallel with its diplomatic push, Việt Nam began intensifying enforcement at home to signal its commitment to fair trade. Authorities tightened the issuance process for certificates of origin (C/O), leading to a spike in business applications in April 2025. They also launched a sweeping crackdown on counterfeit goods and trade fraud—a long-standing problem in the country— deploying specialized enforcement teams to customs checkpoints and increasing border security.

The results were immediate and dramatic; in just one month—from May 15 to June 15—authorities discovered over 1,100 cases of counterfeit goods, 8,200 cases of smuggling, and 25,100 instances of trade fraud. These actions signal Hà Nội’s intent to demonstrate compliance with international trade norms and avert further tariff escalation by Washington.

A Last-Minute Deal In a last-minute development just days before the July 7 deadline, U.S. President Donald Trump announced on July 2 that a trade deal had been struck with Việt Nam. The threatened 46% tariff will be lowered to 20% for many Vietnamese exports, while a steep 40% levy will be imposed on goods trans-shipped through Việt Nam. In return, Việt Nam has reportedly agreed to grant zero-percent tariffs on U.S. products. However, many details of the agreement remain scant, with Hà Nội celebrating a "trade framework" without immediately confirming the specific tariff levels.

The deal is seen as a political boost for the Trump administration and a significant relief for Việt Nam, whose largest export market is the U.S. As part of the ongoing talks, Hà Nội is also pushing for recognition as a market economy and the removal of restrictions on high-tech exports. While the agreement de-escalates immediate tensions, like other recent U.S. trade truces, it resembles a framework for future negotiation rather than a finalized pact, leaving the long-term future of the trade relationship to be determined.