Vietnam Hesitates on Tariff Reduction Ahead of Trump's Reciprocal Tariffs

Vietnam Ranks Third in Trade Surplus with the US at 181 Trillion Won Last Year, Following China and Mexico

Lowers Tariffs on LNG, Cars, Timber, and Agricultural Products to Increase US Imports

Ahead of the Trump administration's announcement on reciprocal tariffs, Vietnam, one of the countries mentioned as a target, has decided to lower the Most Favored Nation (MFN) tariffs on LNG, cars, timber, and agricultural products to increase imports from the US.

According to Bloomberg on the 26th (local time), the Vietnamese Ministry of Finance announced on its website that it would lower import tariffs on certain types of cars from the previous 45%~60% to 32%, LNG tariffs from 5% to 2%, and ethanol from 10% to 5%. It also plans to reduce tariffs on agricultural products such as apples, frozen chicken, almonds, and cherries.

The Vietnamese government explained in a statement that this decision was due to the complex and unpredictable global geopolitical and economic situation.

Last year, Vietnam recorded a trade surplus of $123.5 billion (181 trillion won) with the US. For the US, Vietnam is the third-largest trade deficit country after China and Mexico.

Earlier this month, Vietnam's Minister of Trade visited the US and announced a provisional agreement worth $4.15 billion with US companies. It also stated that it is considering removing trade barriers and cracking down on export fraud.

Petri Deryng, a portfolio manager at PYN Elite Fund, noted that "Vietnam is taking the Trump administration's tariff threats seriously," and pointed out that Vietnam has surprisingly high tariffs on US goods.

The revised decree on Vietnam's MFN tariff adjustments is expected to be announced within this month. Vietnam and the US have expanded cooperation after upgrading their bilateral relationship to a comprehensive strategic partnership in 2023.

Guest Reporter Kim Jung-ah kja@hankyung.com