Vietnam Pursues 8% Growth Amid U.S. Tariff Threat, Initiates Trade Talks to Mitigate 46% Export Tariff Impact

US • Business • 05/05 05:02
Vietnam Pursues 8% Growth Amid U.S. Tariff Threat, Initiates Trade Talks to Mitigate 46% Export Tariff Impact

Vietnam aims for 8% GDP growth by 2025 despite a looming 46% U.S. tariff on its exports. Prime Minister Pham Minh Chinh reaffirmed this target on May 5, amid challenges from U.S. trade policies. The tariff, announced by President Trump, affects key sectors like seafood and wood. Vietnam has started trade talks with the U.S. to mitigate the tariff's impact before a July moratorium ends. Exports to the U.S. are crucial, comprising nearly a third of Vietnam's GDP. The government is also boosting domestic consumption and diversifying trade partners to sustain economic growth.

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Vietnam Pursues 8% Growth Amid U.S. Tariff Threat, Initiates Trade Talks to Mitigate 46% Export Tariff Impact

Vietnam aims for 8% GDP growth by 2025 despite a looming 46% U.S. tariff on its exports. Prime Minister Pham Minh Chinh reaffirmed this target on May 5, amid challenges from U.S. trade policies. The tariff, announced by President Trump, affects key sectors like seafood and wood. Vietnam has started trade talks with the U.S. to mitigate the tariff's impact before a July moratorium ends. Exports to the U.S. are crucial, comprising nearly a third of Vietnam's GDP. The government is also boosting domestic consumption and diversifying trade partners to sustain economic growth.

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Vietnam’s Growth Target Amid Tariff Pressures

Vietnamese Prime Minister Pham Minh Chinh reaffirmed the country’s 2025 economic goals during a parliamentary session on May 5, stating that the government remains committed to achieving at least 8% GDP growth, an economic size exceeding $500 billion, and a per capita income of over $5,000. This comes despite what Chinh described as a “challenging and complicated situation” caused by the U.S. administration’s tariff policy.

The 46% reciprocal tariff, announced by U.S. President Donald Trump in early April, has sent shockwaves through Vietnam’s export sectors, particularly seafood and wood products. The Vietnamese government has responded with a series of policy measures, including boosting domestic consumption, accelerating public investment, and expanding trade with other partners.

Trade Surplus and Tariff Justification

Vietnam’s large trade surplus with the United States—over $123 billion in 2024—has been cited as a key reason for the tariff imposition. The U.S. administration has framed the tariffs as part of a broader effort to promote fair trade and protect American workers. However, Vietnamese officials argue that the measures threaten global supply chains and undermine international trade norms.

In response, Vietnam has taken steps to balance its trade with the U.S., including increasing imports of American goods such as aircraft and medical equipment. The government has also emphasized its commitment to combatting trade fraud and ensuring the transparency of product origin.

Launch of Bilateral Trade Negotiations

Vietnam is among the first countries the U.S. has agreed to engage in tariff negotiations with. The first round of talks is scheduled for May 7, following a series of preliminary discussions between Vietnamese Minister of Industry and Trade Nguyen Hong Dien and U.S. Trade Representative Jamieson L. Greer.

A Vietnamese technical delegation arrived in the U.S. on May 1 to prepare for the negotiations. According to Prime Minister Chinh, the talks are being conducted with the aim of protecting Vietnam’s legitimate trade interests while maintaining compliance with international agreements.

The Vietnamese government has been working closely with its negotiation team and relevant ministries to finalize a comprehensive strategy. Officials have also indicated that Vietnam is open to eradicating tariffs on U.S. imports, although a previous offer to do so was rejected by U.S. trade advisor Peter Navarro.

Exporters React to Tariff Threat

Vietnamese exporters, particularly in the seafood and wood industries, have been racing to ship goods to the U.S. before the 90-day moratorium ends in July. The 46% tariff, if implemented in full, could severely impact these sectors, which are major contributors to Vietnam’s export earnings.

According to trade data, Vietnam’s exports to the U.S. reached $31.4 billion in the first quarter of 2025, a 22% increase year-on-year. Imports from the U.S. also rose by 21% to $4.1 billion. These figures underscore the importance of the U.S. market to Vietnam’s economy and the urgency of the ongoing negotiations.

Strategic Trade Measures and Regional Diplomacy

In anticipation of the tariff impact, the Vietnamese government is preparing a new decree on strategic trade control, aimed at enhancing the quality and competitiveness of its exports. Measures include stricter inspection of product origin, expansion of supply chains, and diversification of export markets.

Vietnam is also leveraging its network of 17 free trade agreements to boost exports to other regions. At the same time, it is deepening economic ties with partners such as South Korea, with a goal of increasing bilateral trade to $150 billion by 2030.

Meanwhile, regional dynamics are also in play. During a visit to Hanoi on April 15, Chinese President Xi Jinping urged Vietnam to resist “U.S. unilateral bullying” and emphasized China’s openness to Vietnamese goods. President Trump responded dismissively to the meeting, suggesting it was an attempt to undermine U.S. interests.

Economic Resilience and Policy Response

Despite the external pressures, Vietnam’s economy showed strong performance in 2024, with a GDP growth rate of 7.09%—the highest in Southeast Asia. The country’s economic scale reached $476.3 billion, ranking 32nd globally, and inflation was kept at 3.63%.

To sustain this momentum, the government is ramping up infrastructure projects, including a multi-billion dollar railway linking the Haiphong port with China. It is also addressing domestic challenges such as power shortages, which have previously disrupted industrial production.

Prime Minister Chinh emphasized that Vietnam will not allow power shortages to recur in 2025, highlighting the government’s focus on maintaining a stable environment for manufacturing and exports.

References

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