Vietnam and U.S. Intensify Trade Negotiations Ahead of July 8 Tariff Deadline Imposed by Trump

Vietnam and the U.S. are in critical trade talks as a potential 46% tariff on Vietnamese imports, announced by former President Trump, looms with a July 8 deadline. Initial discussions began on April 23 between Vietnamese Trade Minister Nguyen Hong Dien and U.S. Trade Representative Jamieson Greer. Vietnam seeks recognition as a market economy and relief from high-tech export restrictions. The proposed tariff has impacted Vietnam's manufacturing sector, prompting increased exports and lobbying for reduced tariffs. The U.S. is concerned about Vietnam's role in channeling Chinese goods, complicating the negotiations.

A High-Stakes Negotiation Begins

The trade talks were triggered by Trump’s April 2 announcement of sweeping reciprocal tariffs, including a proposed 46% levy on Vietnamese goods. The announcement, made on Vietnam’s Liberation Day, sent shockwaves through the Southeast Asian nation’s export-driven economy. On April 23, Minister Nguyen Hong Dien and USTR Jamieson Greer held a virtual meeting to initiate formal discussions. Greer described the talks as “productive,” emphasizing the shared goal of achieving “reciprocal and balanced trade” between the two countries.

Prime Minister Pham Minh Chinh later told Vietnam’s National Assembly that the U.S. had agreed to begin negotiations with Vietnam ahead of other countries, underscoring the urgency of the situation. Chinh also reiterated Vietnam’s desire to establish a “comprehensive strategic partnership” with the United States.

Tariff Threat and Industry Response

The proposed 46% tariff is among the highest in Trump’s new trade framework and has already begun to impact Vietnam’s manufacturing sector. Global brands such as Adidas, Nike, and New Balance, which rely heavily on Vietnamese production, have accelerated output to ship goods before the July 8 deadline. Seafood exporters are planning to increase U.S.-bound shipments by 10–15% in May compared to April.

However, the uncertainty has also led to a freeze in expansion plans and order cancellations. Garment manufacturers, in particular, have warned that tariffs above 20% would be unsustainable. Industry leaders are lobbying for a reduced rate between 20% and 28%, which they believe would allow operations to continue, albeit with thinner margins.

Vietnam’s Strategic Proposals

In an effort to secure a favorable outcome, Vietnam has proposed several measures. These include increasing imports from the U.S., addressing the bilateral trade imbalance, and seeking early recognition as a market economy. Vietnam is also requesting the removal of U.S. restrictions on high-tech exports.

During a recent working session with U.S. Ambassador Marc Knapper, Minister Nguyen Hong Dien emphasized Vietnam’s commitment to intensifying cooperation with American partners through June 2025. The Vietnamese government has also directed domestic firms to collaborate with U.S. stakeholders and lobby American lawmakers to maintain the current flow of Vietnamese goods.

Trade Data and Economic Context

Vietnam’s economic exposure to the U.S. is significant. In 2024, exports to the U.S. accounted for approximately 28.7% of Vietnam’s GDP, with bilateral trade reaching $155.6 billion. The U.S. trade deficit with Vietnam stood at $129.4 billion, the highest among ASEAN countries and third globally.

Vietnam is also the 11th largest supplier of processed produce to the U.S., with exports in the first two months of 2025 totaling $122.4 million—a 57.7% increase from the same period in 2024. However, the IMF recently downgraded Vietnam’s 2025 growth forecast from 6.1% to 5.2%, citing external pressures including the looming U.S. tariffs.

U.S. Concerns and Regional Dynamics

Washington has expressed concerns that Vietnam may be serving as a conduit for Chinese goods to enter the U.S. market, particularly in sectors like electronics, garments, and furniture. Approximately 30% of the foreign value added in Vietnam’s exports to the U.S. originates from China, the highest among ASEAN nations.

This has placed Vietnam in a delicate position between the world’s two largest economies. While seeking closer ties with the U.S., Vietnam also relies heavily on China for raw materials and components. Beijing has warned of retaliatory measures against countries that sign trade deals with the U.S. that could harm Chinese interests.

Diplomatic and Policy Developments

Vietnam’s trade ministry has publicly called the proposed 46% tariff “unreasonable” and has urged domestic companies to provide documentation proving that their products are manufactured in Vietnam. The ministry has also encouraged firms to explore alternative export markets, leveraging Vietnam’s existing trade agreements such as the CPTPP, EVFTA, and RCEP.

Meanwhile, the U.S. has signaled that its new trade policy aims to promote investment and protect American workers without harming partner countries. USTR Greer has described the ongoing talks with Vietnam as “fruitful,” noting that both sides understand the issues at stake.

Timeline of Key Events

April 2, 2025: President Trump announces a 46% reciprocal tariff on Vietnamese imports.
April 5, 2025: Vietnam’s General Secretary To Lam requests a 45-day delay in tariff implementation.
April 9, 2025: Original effective date of the tariffs; implementation is paused for 90 days.
April 23, 2025: Initial trade talks begin with a virtual meeting between Nguyen Hong Dien and Jamieson Greer.
May 2025: Negotiations intensify in Hanoi; Vietnam seeks market economy status and tariff reductions.
July 8, 2025: Deadline for the expiration of the 90-day tariff pause.