Vietnam is racing against time to shield its agricultural sector from a potential economic blow as the United States threatens to impose retaliatory tariffs as high as 46 percent on Vietnamese goods. With agricultural exports to the US surpassing $14 billion in 2024, the Ministry of Agriculture and Environment is mobilizing contingency plans to mitigate the fallout if negotiations for tariff reductions fail. As exporters and policymakers scramble to respond, the stakes are high for an industry that has become a cornerstone of Vietnam’s economy.

Urgent Response to Tariff Threats

On April 3, 2025, US President Donald Trump announced plans for sweeping retaliatory tariffs on Vietnamese imports, prompting immediate action from Hanoi. Minister of Agriculture and Environment Đỗ Đức Duy emphasized the government’s commitment to pursuing a negotiated reduction in tariffs but underscored the need for preparedness in case the US enforces the policy without delay. “Vietnam remains hopeful for a negotiated reduction. But we must be prepared for the possibility that the United States enforces this policy without delay” he told ministry units, major exporters, and industry associations during a meeting on April 6.

The proposed tariffs, which could reach 46 percent on certain goods, threaten to disrupt a bilateral trade relationship that has seen Vietnam’s agricultural, forestry, and fishery exports to the US consistently exceed $13 billion annually in recent years. In 2024 alone, exports hit $14.31 billion, a 25 percent increase from the previous year, while imports from the US stood at $3.44 billion, resulting in a trade surplus of over $10 billion for Vietnam. The first quarter of 2025 saw agricultural exports to the US reach $3.21 billion, up 14.9 percent year-on-year, with key categories including wood products, seafood, pepper, cashew nuts, coffee, and fresh produce like dragon fruit.

Department of Quality, Processing, and Market Development Director Ngô Hồng Phong warned that even a flat 10 percent tariff across all imports would significantly disrupt the trade balance and weigh heavily on the agricultural sector’s performance in 2025. With the possibility of varying rates by product group, the department has called for an urgent sector-by-sector impact assessment to understand the full scope of potential damage.

Immediate Measures and Short-Term Strategies

In response to the looming deadline of April 9, when the new tariff regime is expected to take effect, the department has proposed expediting all shipments to the US to beat the cutoff. This strategy aims to minimize immediate financial losses for exporters already locked into contracts with American buyers. Phong also urged close coordination between ministries, businesses, and logistics providers to fast-track customs clearance and delivery of goods, ensuring that as much produce as possible reaches US shores before the tariffs are enforced.

Beyond logistics, exporters have been encouraged to engage proactively with US importers to renegotiate existing contracts and explore ways to equitably distribute any tariff burden. This collaborative approach could help maintain business relationships despite the economic strain. Additionally, Phong highlighted the importance of reinforcing traceability standards to ensure Vietnamese products are not mischaracterized as re-routed Chinese goods—a concern likely to attract scrutiny from US customs authorities. “Having a clear and verifiable origin is essential to making the case for exemptions or reduced tariffs on specific product groups” he noted.

Minister Duy also floated the possibility of government support packages to cushion the blow for exporters. These could include tax relief, access to credit, or targeted financial mechanisms designed to stabilize the sector during this period of uncertainty. While details of such packages remain under discussion, the minister urged stakeholders to jointly assess the situation and propose tailored policy responses to address the unique challenges faced by different agricultural sub-sectors.

Long-Term Diversification and Market Redirection

While short-term measures focus on damage control, Vietnam is also looking ahead to reduce its reliance on the US market over the longer term. The Department of Quality, Processing, and Market Development has outlined a strategic redirection of export markets, prioritizing regions with existing free trade agreements and strong demand for Vietnamese goods. East Asia and the European Union are seen as viable alternatives, offering significant trade volume potential for Vietnam’s agricultural products.

Specific market redirections have been proposed for key product groups. Wood and wood products are targeted for increased exports to Japan, China, and the EU, while seafood could see expanded markets in China, Japan, the EU, and South Korea. Cashew nuts are earmarked for the EU, China, the UAE, and the United Kingdom, and pepper for the EU, the UAE, India, and China. Fruits and vegetables, including Vietnam’s signature dragon fruit, are slated for growth in China, South Korea, the EU, and ASEAN countries, while coffee exports are prioritized for Germany, Italy, and Japan. This diversification strategy aims to spread risk and build resilience against future trade disruptions in any single market.

The push for diversification comes at a critical juncture. Vietnam’s agricultural sector has benefited immensely from access to the US market in recent years, but the current tariff threat underscores the vulnerabilities of over-reliance on a single trading partner. By strengthening ties with other regions, Vietnam hopes to create a more balanced export portfolio that can weather geopolitical and economic storms.

The potential imposition of US tariffs carries far-reaching implications beyond immediate trade figures. Vietnam’s agricultural sector employs millions of people, particularly in rural areas like Binh Thuan Province, a hub for dragon fruit cultivation. A significant drop in export revenue could ripple through local economies, affecting farmers, processors, and ancillary industries such as logistics and packaging. For smallholder farmers, who often operate on thin margins, even a modest increase in tariffs could translate into reduced income and heightened financial insecurity.

Moreover, the trade surplus with the US has been a point of pride for Vietnam, symbolizing the country’s growing clout in global markets. A disruption to this balance could dampen investor confidence and slow momentum in other sectors tied to agricultural exports, such as manufacturing inputs for food processing. If the tariffs are implemented as threatened, Vietnam may face not only economic challenges but also a broader reassessment of its trade strategy on the world stage.

On the geopolitical front, the tariff threat adds another layer of complexity to Vietnam-US relations. While the two countries have deepened economic ties in recent decades, trade disputes like this one highlight lingering tensions. Vietnam’s government must navigate these waters carefully, balancing the need to protect domestic industries with the broader goal of maintaining a constructive partnership with the US, a key player in regional security and economic affairs.

Global Context and Comparative Challenges

Vietnam is not alone in facing US tariffs under the current administration’s trade policies. Other Southeast Asian nations, including Thailand and Indonesia, have encountered similar pressures as the US seeks to address trade imbalances and protect domestic industries. However, Vietnam’s particularly large trade surplus with the US—over $10 billion annually—makes it a prominent target for retaliatory measures. The outcome of this dispute could set a precedent for how the US approaches trade negotiations with other regional economies, potentially reshaping economic alignments across Southeast Asia.

Analysts note that Vietnam’s response to the tariff threat could serve as a model for other nations grappling with similar challenges. By combining immediate logistical adjustments with long-term market diversification, Vietnam is attempting to turn a potential crisis into an opportunity for structural reform. If successful, this approach could position Vietnam as a leader in adaptive trade policy within the region.

Looking Ahead

As the April 9 deadline looms, Vietnam’s agricultural sector stands at a crossroads. The government’s ability to secure a favorable outcome in tariff negotiations with the US remains uncertain, and the contingency plans now in motion will be tested in the weeks and months ahead. For exporters, farmers, and policymakers alike, the focus is on minimizing disruption while laying the groundwork for a more diversified and resilient trade future.

Questions linger about the broader impact of these tariffs on Vietnam’s economy and its standing in global markets. Will the push for new export destinations yield results quickly enough to offset potential losses in the US? And how will rural communities, already vulnerable to market fluctuations, weather this storm? As Hanoi navigates these uncharted waters, the resilience of Vietnam’s agricultural backbone will be put to the ultimate test.