Vietnam races against time as Trump’s tariff deadline looms

The U.S. and Vietnam have kicked off critical trade negotiations as the Southeast Asian nation faces a potential 46% tariff that could significantly impact its export-driven economy.

Today’s negotiations in Hanoi mark the first substantive talks between the U.S. and Vietnam since President Donald Trump unveiled his reciprocal tariffs on “Liberation Day” on April 2.

Initial discussions began on April 23 with a call between Vietnamese Trade Minister Nguyen Hong Dien and U.S. Trade Representative Jamieson Greer, in which Nguyen expressed Vietnam’s desire to develop a “comprehensive strategic partnership” with the U.S. On Monday, Prime Minister Pham Minh Chinh told parliament that Vietnam is among the first countries the U.S. has agreed to negotiate tariffs with, highlighting the urgency as the deadline approaches.

The threatened 46% levy — among the highest rates in Trump’s tariff plan — has sent shockwaves through Vietnam’s manufacturing sector, where global brands like Adidas, New Balance and Nike maintain significant production facilities. Some factories have accelerated production to beat the July 8 deadline, with seafood exporters planning to increase U.S. shipments by 10-15% in May compared to April.

Others are freezing expansion plans or canceling orders amid the uncertainty. Vietnamese garment manufacturers are particularly vulnerable, with industry representatives indicating that tariffs exceeding 20% would be unsustainable for many factories.

Vietnam, whose growth forecast has been lowered by the IMF from 6.1% to 5.2%, finds itself caught between the world’s two largest economies. While the country exports roughly 30% of its goods to the U.S., it also relies on China for components and raw materials. Washington has expressed concerns that Vietnam may serve as a backdoor for Chinese goods entering American markets, while Beijing has warned it will retaliate against countries signing deals with the U.S. that harm Chinese interests.

Chinh is seeking Vietnam’s early recognition as a market economy and removal of restrictions on high-tech exports in exchange for addressing the trade imbalance. Meanwhile, industry leaders hope to reduce the final tariff rate to 20-28%, which local manufacturers believe would allow them to maintain operations, albeit with reduced margins.