AmCham Vietnam voices concerns over President Trump's massive tariffs

The 46% reciprocal tariffs announced by President Donald Trump have created significant uncertainty and potential disruption for companies operating in Vietnam, said the American Chamber of Commerce.

"The suddenness of their implementation and the substantial scale of the tariffs have created significant uncertainty and potential disruption for businesses operating in Vietnam," AmCham in Vietnam wrote in a release on Friday.

"AmCham members require certainty and stability to operate effectively. We ask both governments to expedite negotiations aimed at reducing these duties to the lowest possible levels," it added.

Trump on Wednesday stated that he will levy a 46% duty on imports from Vietnam, effective April 9, as part of a new wave of global impositions. The tax for Vietnam is among the highest, only after Laos (48%) and Madagasca (47%).

It is higher than many others like Sri Lanka and Myanmar (44%), Bangladesh (37%), Thailand (36%), mainland China (34%), Taiwan (32%), India (26%), South Korea (25%), Japan and Malaysia (24%), the EU (20%), and the Philippines (17%).

"The AmCham promotes trade and investment between the U.S. and Vietnam, through free and fair trade and economic policy that fosters productivity and predictability. The size and immediacy of the 46% reciprocal tariffs are wholly inconsistent with these goals," the chamber highlighted.

AmCham said that while it acknowledges the need to address the growing trade deficit between the two nations, it strongly urges the U.S. administration to consider implementing a grace period. Such a period would allow businesses on both sides to adapt to the new regulations, mitigating unnecessary disruption and financial harm.

"Currently, the immediate implementation negates the opportunity for businesses to adjust to the new conditions, as commercial decisions have already been made based on prior trade agreements," it argued.

AmCham believes that the U.S. and the Vietnamese government are aligned on the fact that the growth in the trade deficit is simply not sustainable. "The U.S. administration has made clear that one of the goals of the reciprocal tariffs is to bring greater reciprocity to the tariff rates each country applies to the other."

The chamber said it would welcome lower tariffs on U.S. goods entering Vietnam as one way of addressing the trade imbalance, and of significantly reducing the reciprocal duties. Duties on U.S. goods should at least be equal to those applied to Vietnam’s other trading partners and to those applied to Vietnamese goods entering the U.S.

"The U.S. is the largest export market for Vietnamese goods, yet it is also assessed some of the highest duties of Vietnam’s leading trading partners," it wrote.

"We are hopeful that both countries can align on reduced duty rates to levels both view as reciprocal so that we can continue the trade relationship that has benefited all participants."

Vietnam's Prime Minister Pham Minh Chinh on Thursday requested the immediate establishment of a rapid reaction force, following President Trump's tariff announcement. The team will be headed by Deputy Prime Minister Bui Thanh Son.

Truong Ba Tuan, deputy director of the Ministry of Finance's tax policy department, told a press meeting on Thursday that Vietnam's tariffs on imports from the U.S. are much lower than the 90% or 46% calculated by this country.

Vietnamese exporters have voiced concern that if the 46% tariff rate is imposed, they will face massive difficulties. However, some experts argued that the tariff, effective from April 9, is not as alarming as it seems, as the situation will ultimately depend on the negotiations between the two parties.

Market participants and big U.S. businesses alike did not expect tariffs of significantly more than 10% on Vietnam’s exports to the U.S. Companies in the U.S. ramped up their imports from China and car imports from the EU in the lead-up to the April tariff announcement but did not significantly ramp up their imports from Vietnam, accoding to Michael Kokalari, chief economist at VinaCapital.

The shocking announcement drove the VN-Index down nearly 7% on Thursday, wiping out all the gains it has made since the beginning of the year.

However, the selling was fairly uniform across-the-board, indicating that market participants will need more time and information to digest the likely impact of all of this on the economy and earnings growth, Kokalari noted in an analysis.

"It will be interesting to see how Vietnam engages with the U.S., as well as other large trading partners to mitigate the short-and long-term impacts of these tariffs. Deputy Prime Minister Ho Duc Phoc is scheduled to travel to New York city this weekend," he wrote.

A survey made in early February shows that as many as 81% of American firms in Vietnam were concerned about potential tariff imposed by the Trump administrative on Vietnamese goods, according to AmCham.

The survey features over 100 member companies as respondents. AmCham elaborated that the “concern” sentiment is particularly strong within the manufacturing sector with 92% noting their concerns.

According to Vietnam Customs, in 2024, Vietnam exported goods worth $119.5 billion to the U.S. and spent $15.1 billion on imports from this economy. There were 15 items with billion-U.S. dollar export turnovers, of which three dominant groups were computers and components ($23.2 billion), machinery and equipment ($22 billion), and textile ($16.2 billion).

Phones, wood, and footwear were also the items that recorded great export values, in the range of $8.3-9.8 billion. Agricultural products also made important contributions, such as cashew nuts and seafood with $1.15 billion and 1.83 billion, respectively, and coffee with nearly $323 million.