Vietnam has announced import tariff cuts ahead of the entry into effect of President Donald Trump’s tariffs aimed at fixing the trade deficit the United States has with many of its trade partners globally.
According to a statement by the Vietnamese government, imports that will see reduced import levies include liquefied natural gas, cars, ethanol, wood products, and various foodstuffs. For LNG, the import tariff rate would be reduced from 5% to 2%, while the tariff on imported cars would be slashed from 64% to 32%. Ethanol tariffs would be reduced from 10% to 5%.
Vietnam has the third-highest trade surplus with the United States, at $123.5 billion as of last year, according to Bloomberg. This puts the Asian nation right behind Canada and China in terms of trade imbalance from the U.S. perspective.
Trump’s choice of enforcing tariffs to make up for trade deficits has already spurred many U.S. trade partners in Asia into action with regard to energy imports. The U.S. president has expressly stated that a substantial increase in energy imports from the world’s largest producer would be a positive development and countries including Japan, South Korea, India, and Taiwan, have responded favorably. Vietnam has also been among these countries.
Compared with the European Union, which is the largest LNG client of U.S. producers, Vietnam is a minuscule buyer, at 330,000 tons for last year, per Kpler data. Yet with the cuts in import tariffs this amount could grow—which is precisely the point as the Vietnamese government eyes higher LNG imports in order to appease the U.S. president.
“Vietnam takes the Trump administration’s threats concerning tariffs seriously, even if China seems to be the main target in Asia,” one analyst told Bloomberg in comments on the tariff cuts earlier this month. “Still, the country does have a surprising number of tariffs on goods imported from the US,” Petri Deryng from PYN Elite Fund told the publication.
