Vietnam Forms Trade Negotiation Team to Counter US Tariffs

In a strategic move to address escalating trade tensions with the United States, Vietnam has established a high-level government negotiating team tasked with forging a reciprocal trade agreement. Announced on Saturday by the Prime Minister, the decision comes as the US imposes steep tariffs on Vietnamese goods, threatening the Southeast Asian nation’s export-driven economy.

A High-Stakes Response to US Tariffs

The formation of the negotiating team, led by Minister of Industry and Trade Nguyễn Hồng Diên, signals Vietnam’s urgency in mitigating the impact of a 46 percent tariff on all goods exported to the US, layered atop a baseline 10 percent rate. These measures, introduced earlier this month by the administration of US President Donald Trump, pose a significant challenge to Vietnam’s key industries, including textiles, garments, and electronics, which rely heavily on the American market. The US Treasury Secretary, Scott Bessent, has been named as the chief negotiator for Washington in these discussions, confirming the bilateral nature of the impending talks.

With Deputy Minister Nguyễn Sinh Nhật Tân as deputy head, the Vietnamese team comprises deputy ministers from Finance, Agriculture and Environment, Science and Technology, Foreign Affairs, and Home Affairs, alongside a Deputy Governor of the State Bank of Vietnam and the Vietnamese Ambassador to the United States, Nguyễn Quốc Dũng. This broad representation underscores the multifaceted approach Vietnam is adopting, ensuring expertise across economic, diplomatic, and regulatory domains. The Ministry of Industry and Trade will act as the standing agency, supported by a working group of officials from various ministries.

Navigating a Complex Trade Landscape

The team’s mandate is threefold: to develop negotiation scenarios and plans that prioritize national interests under the principle of “harmonized benefits, shared risks,” to conduct talks aimed at securing a stable and mutually beneficial agreement, and to provide the Prime Minister with detailed reports and policy recommendations for post-agreement implementation. This structured approach reflects Vietnam’s intent to not only address immediate tariff concerns but also lay the groundwork for a sustainable trade relationship with the US, its second-largest export market after China.

Vietnam’s export economy has flourished in recent years, with annual exports to the US valued at approximately 123 billion USD in 2024, according to data from the General Statistics Office of Vietnam. Textiles and garments, a sector employing millions, alone accounted for over 27 billion USD of this total. The new tariffs, if unchallenged, could slash these figures dramatically, risking factory closures and widespread job losses. For context, a garment worker in Hanoi earning a monthly wage of around 7 million Vietnamese Dong (US$275) could see their livelihood jeopardized if export orders dwindle.

Analysts suggest that Vietnam’s strategy will likely focus on leveraging its position as a manufacturing hub, offering concessions such as improved market access for US goods in exchange for tariff reductions. However, the negotiations are expected to be contentious, given the Trump administration’s hardline stance on trade deficits—Vietnam’s trade surplus with the US stood at 104 billion USD in 2024, a figure often criticized by American policymakers.

Broader Implications for Regional Trade

Beyond immediate economic impacts, the outcome of these negotiations could reshape Vietnam’s role in global trade networks. As a signatory to multiple free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), Vietnam has positioned itself as a key player in Asia-Pacific commerce. A favorable deal with the US could strengthen this standing, potentially offsetting losses from tariffs by diversifying trade partnerships. Conversely, prolonged tensions might push Vietnam to deepen ties with the European Union or China, altering regional economic dynamics.

The timing of this initiative also coincides with domestic pressures. Vietnam’s government, led by the Communist Party of Vietnam (CPV), faces the dual challenge of maintaining economic growth—targeted at 6.5 percent for 2025—and ensuring social stability. Rising costs of living, exacerbated by potential export declines, could fuel public discontent if not addressed. The negotiating team’s ability to secure favorable terms will thus be seen as a litmus test for the CPV’s economic stewardship.

US Perspective and Tariff Rationale

From the US side, the tariffs on Vietnamese goods are part of a broader policy to address perceived imbalances in international trade. The Trump administration has framed these measures as a means to protect American jobs and reduce reliance on foreign manufacturing. Scott Bessent, in a recent statement reported by Reuters, emphasized the need for “fair and reciprocal trade” with partners like Vietnam. While specifics of the US negotiation strategy remain undisclosed, it is widely anticipated that Washington will push for stricter intellectual property protections and labor standards as conditions for tariff relief.

Critics of the US policy argue that such tariffs may backfire, increasing costs for American consumers who rely on affordable Vietnamese goods, from clothing to smartphones. A report by the US Chamber of Commerce estimated that the tariffs could raise retail prices by up to 8 percent for affected categories, a burden likely to be felt most acutely by low-income households. Whether these domestic pressures will influence the US negotiating position remains an open question.

Challenges and Speculative Outcomes

Vietnam’s negotiating team faces an uphill battle. Beyond the immediate tariff issue, longstanding concerns such as currency valuation—Vietnam has previously been labeled a currency manipulator by the US Treasury, though this designation was lifted in 2021—and compliance with international labor standards could complicate discussions. If unresolved, these issues may prolong the tariff regime, with ripple effects across Vietnam’s economy.

Speculatively, some trade experts suggest that Vietnam might offer to increase imports of US agricultural products, such as pork and soybeans, as a bargaining chip. While no official proposals have been confirmed, such a move could appeal to American farming states, a key constituency for the Trump administration. However, any such concessions would need to be balanced against Vietnam’s domestic agricultural interests, adding another layer of complexity to the talks.

Looking Ahead: A Test of Resilience

As Vietnam and the United States prepare for what promises to be a defining series of negotiations, the stakes could not be higher. For Vietnam, a successful outcome could safeguard millions of jobs and reinforce its status as a rising economic power. For the US, the talks offer an opportunity to recalibrate trade relations in line with domestic priorities. Yet, with both sides holding firm to their respective interests, the path to agreement is far from assured.

In Hanoi, factory workers and business owners alike watch with bated breath. The coming months will reveal whether Vietnam’s strategic diplomacy can turn the tide against punitive tariffs, or if the nation must brace for a prolonged economic storm. As one textile exporter in Ho Chi Minh City put it, “We’ve built our future on trade with America. Now, we just hope there’s still a future to build.”