In April 2025, President Donald Trump announced a retaliatory tariff of up to 46% on most imports from Vietnam. This was not only a response to Vietnam’s trade surplus with the U.S., but also an attempt to regulate how international companies use Vietnam as a transshipment point to benefit from favorable tariff rates.
According to Reuters, an internal Vietnamese government document revealed that the U.S. had expressed concerns about certain exports labeled "Made in Vietnam" that may not have fully met origin requirements. This prompted Vietnam to tighten its regulations on verifying product origins.
Both the Vietnamese government and local businesses now recognize that diplomatic goodwill alone is no longer enough. While it is a necessary condition, the sufficient condition lies in a long-term strategy built on transparent manufacturing and sustainable business practices.
1. The U.S. Remains Vietnam’s Largest Export Market
The United States has long been one of Vietnam’s most important export destinations. In 2024, exports to the U.S. reached nearly $119 billion, accounting for around 35% of Vietnam’s total export turnover, according to the General Statistics Office. Key exports include garments, footwear, wood products, electronic components, and seafood. This level of dependence means any shifts in U.S. trade policy can have significant ripple effects across Vietnam’s economy. The 46% tariff came as a shock to many businesses.
2. But Not All Goods Were Hit With The 46% Tariff
Although the new tariff was broadly announced, in reality, not all Vietnamese goods were subjected to the full 46%. Some categories with clearly traceable local production processes, which rely on domestic or regional materials and maintain strong supply chain control, were spared. Products like natural rubber, coffee, cashews, silk from Lam Dong, and traditional bamboo and rattan crafts remained stable despite the trade shock. According to a Q1 2025 VCCI report, exports of these goods to the U.S. grew steadily, with increases of 8% to 12% compared to the same period the year before.
The main distinction between highly taxed and exempted goods lies in transparency and the degree of Vietnam’s control over the production chain. Goods less affected by the tariff were typically produced and managed entirely within Vietnam—from raw materials to design, manufacturing, packaging, and distribution—with clear documentation of origin.
Conversely, some products labeled "Made in Vietnam" still rely heavily on imported materials, technologies, or processes. This has raised concerns about the validity of their origin claims and potential trade fraud risks.
3. Is There Hope For Tariff Reduction?
According to diplomatic sources, the U.S. is considering reducing the tariff rate to around 22% or even restoring previous levels—provided Vietnam can demonstrate stronger transparency in its supply chain and increase local production. A 22% tariff is viewed as more realistic and far less disruptive than the 46%, which had sent shockwaves through the business community.
Back in 2018–2020, when the U.S. imposed 25% tariffs under Sections 301 and 232, many Vietnamese businesses prepared response strategies. Research by Pham and Wie (2023) showed that local firms successfully expanded their exports to the U.S. by adapting to the shifting supply chain landscape. This suggests that Vietnam has the flexibility to adjust and maintain its trade competitiveness.
4. Challenges For Vietnamese Enterprises
International partners play an undeniable role in Vietnam’s manufacturing sector. They provide essential materials, technology, and management expertise, helping local firms lower costs and improve productivity.
However, heavy reliance on external sources also presents strategic vulnerabilities. To demonstrate transparency and self-reliance, Vietnam must confront challenges such as rising input costs, the need to diversify suppliers, and growing competition from countries like Indonesia, India, Bangladesh, and Cambodia—all of which are stepping up to attract investment.
5. A Message Of Transparency And Goodwill From Vietnam
Under pressure from the U.S., Vietnam has taken concrete steps to show its commitment. The government has ordered tighter origin inspections, especially in high-risk sectors like furniture, electronics, and textiles. Companies found to have violated origin rules are being investigated. At the same time, Vietnam has reaffirmed its willingness to cooperate with the U.S. to prevent trade fraud and continue constructive bilateral negotiations.
While the overall tariff policy remains controversial and unresolved, a major development took place on May 29 when a panel of judges at the U.S. Court of International Trade ruled the tariffs unlawful and ordered them permanently invalidated.
Amid continued negotiations and lingering uncertainty, this is a great opportunity for Vietnam to reposition itself in the global supply chain. By demonstrating internal capacity and a transparent approach to production, Vietnam can reduce tariff risks and enhance its reputation on the world stage.
Vietnam now stands at a critical crossroads in its trade relationship with the United States. The 46% tariff is unprecedented, but it also opens the door for necessary reforms and a shift toward sustainable, transparent manufacturing. Achieving a 22% tariff or lower would not just reflect successful diplomacy—it would also affirm Vietnam’s long-term commitment to building a credible and resilient production ecosystem.