Vietnam is worried about the economy and is “preparing to withdraw tariffs on the United States”

On April 6, data released by the General Statistics Office of Vietnam showed that the real gross domestic product (GDP) in January-March increased by 6.93% year-on-year. However, with the tariffs launched by US President Trump, the outside world is increasingly vigilant about the sharp slowdown in Vietnam’s economic growth. Vietnam’s top leader said that “we are ready to negotiate to reduce import tariffs to zero” for imported goods from the United States.

The GDP growth rate from January to March is the highest record in Vietnam after the COVID-19 pandemic. The main driving force for growth comes from exports. Exports from January to March were US$102.8 billion, an increase of 11% year-on-year. Among them, the United States is Vietnam’s largest export destination, accounting for about 30% of total exports. Driven by export growth, the manufacturing industry, which accounts for about a quarter of GDP, grew by 9.28%.

Vietnam’s growth potential is also very prominent among major Southeast Asian countries. However, the reciprocal tariffs launched by US President Trump have cast a shadow on Vietnam.

The tariff rate proposed by the Trump administration to Vietnam is as high as 46%, one of the highest levels among all countries and regions. Vietnamese Prime Minister Pham Minh Chinh insists on achieving a GDP growth of more than 8% in 2025. However, Dutch financial institution ING Group predicts that the reciprocal tariffs may have an impact of 5.5% on Vietnam’s GDP.

Considering the actual situation of previous tariffs and Vietnam’s value-added tax, many companies and experts originally predicted that the tariff rate would range from a few percentage points to more than 10%. Nguyen Khac Giang, a visiting researcher at the ISEAS-Yusof Ishak Institute, who is familiar with Vietnamese politics, criticized that “this rate is economically meaningless and does not reflect the actual situation of trade between the two countries.”

In order to quell the chaos, the Communist Party of Vietnam has begun to trade with the Trump administration.

“Vietnam is ready to negotiate to reduce import tariffs from the United States to 0%,” Vietnam’s top leader and General Secretary of the Communist Party of Vietnam To Lin made it clear when he spoke with Trump on the phone on the evening of the 4th. After the negotiations, Trump posted on social media that “this was a very constructive dialogue.”

After the announcement of the reciprocal tariffs, the Vietnamese government immediately sent the Deputy Prime Minister, who was once the Minister of Finance, to the United States. At the same time, an emergency response team was established in the country.

The impact of the reciprocal tariffs on Vietnam’s economy is huge. On the stock market on the 3rd, the representative stock price index “VN Index” fell nearly 7% from the previous trading day, hitting the largest drop in history.

“About 9,500 Korean companies in Vietnam may be directly affected,” said Kim Hyung-mo, the representative of the Korea Chamber of Commerce and Industry in Vietnam. The number of Korean companies in Vietnam is about four times that of Japanese companies. Samsung Electronics manufactures more than 50% of its smartphones in Vietnam.

Among Vietnam’s exports, overseas companies account for 70%. If Vietnam cannot attract investment from overseas companies including Japan, its economic growth will be unsustainable. Kim Hyung-mo called for “I hope Vietnam will emphasize its strategic position against China in negotiations with the United States and strive to achieve tariff exemptions in strategic areas such as electronic equipment.”

Vietnam’s economic activities have shown signs of slowing down. In a wide range of industries such as textiles and aquatic products, there has been a trend of stopping exports to the United States.

A person related to the aquatic industry admitted, “We don’t understand the rules, it’s very confusing.” In order to avoid high tariffs, they hoped to speed up the shipment of inventory, but the unclear application criteria of tariffs made it difficult to feel at ease, even goods in sea transport could be subject to high tariffs. In the aquaculture industry, exporters often bear the tariffs, so they may suffer huge losses.