Vietnam's 20% reciprocal tax rate positive compared to Southeast Asian peers: NaFoods exec

The 20% reciprocal tax rate is favorable compared to other Southeast Asian countries with similar agricultural products like the Philippines, but strict control over the origin of Vietnamese goods is essential to avoid a 40% "transshipping" tariff, said Nguyen Manh Hung, chairman of NaFoods Group.

Hung made the remarks at the launch of the Vietnam-U.S. international B2B e-commerce platform last Friday in Ho Chi Minh City. NaFoods Group is a major agriculture product exporter in Vietnam.

He added that exports to the U.S. account for 20-22% of the company’s revenue. Since news of the reciprocal tax policy emerged, customers have become more cautious. Although sales in the first half of the year increased, profits remained low due to high logistics costs as many companies rushed to boost shipments to the U.S.

He warned that without strict origin verification, Vietnamese goods risks being taxed at 40%. Therefore, certificates of origin for agricultural exports must be issued in a standardized and transparent manner.

Vu Ba Phu, director of the Trade Promotion Agency under the Ministry of Industry and Trade, emphasized that the U.S. has long been a crucial trade partner for Vietnam.

“The range of goods Vietnam can export to the U.S. is extremely broad, everything from low-cost fashion items to products priced in the hundreds of dollars per unit - depending on the importer and distribution channel. With such enormous purchasing power, the U.S. is a target market for exporters worldwide. This means that whether the reciprocal tax rate is 20% or 40%, we can still export there. The key is doing so profitably,” said Phu.

Phu added that Vietnam-U.S. trade has maintained strong growth. In the first seven months of 2025, Vietnam’s exports to the U.S. rose nearly 28%, largely because American importers increased orders in the first half of the year to prepare for the tax changes.

“In some respects, negotiating a 20% tariff for goods of Vietnamese origin - and 40% for transshipped goods without clear origin - was a positive outcome,” Phu noted.

Looking ahead, Phu cautioned that due to the surge in imports to the U.S. earlier this year, inventories there will be high. This situation mirrors what happened during and after the Covid-19 period and could cause exports in key sectors - such as textiles, wood products, and food - to stagnate in late 2025 and potentially into the first half of 2026.

While a 20% rate is still higher than previous levels, especially for agricultural goods, Phu stressed the importance of moving beyond raw exports and increasing value-added processing. Competing exporters such as Thailand, Indonesia, and Malaysia have similar product structures but enjoy a lower 19% U.S. tariff. He also emphasized that as rules on origin grow stricter, export documentation must be completely transparent.

For long-term sustainability, Hung of NaFoods Group said businesses should establish distribution hubs directly in overseas markets. This would ensure a reliable supply chain and provide tariff advantages.

“NaFoods has proposed building a hub in the U.S., combining Vietnamese materials with local inputs for production,” Hung said. “This is our way of ‘setting sail’ - a strategy for sustainable growth.”