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American companies are urging Washington to lower Vietnam’s tariffs, claiming that Southeast Asian countries have become an important part of their “China and one” diversification strategy.
Vietnam was one of the biggest winners of the trade war in US President Donald Trump’s first term as manufacturers moved from China. Apple, Intel and Nike are one of the American companies that rely heavily on Vietnam.
As a result of that production shift, the Southeast Asian country’s trade surplus with the US exceeded $125 billion last year, ranking third behind China and Mexico. The Trump administration imposed a 46% tariff on Vietnam in April — one of the highest after China — suspended taxes on trade negotiations.
The American Chamber of Commerce in Hanoi, whose members include Vietnamese subsidiary of large investors such as Apple, suggested that the move could counter the strategic interests of the US in Southeast Asia, which is about to diversify from China.
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“Vietnam has emerged as a valuable partner for the US in the context of diversifying supply chains,” the Chamber of Commerce said in a letter sent to US and Vietnamese officials, according to a copy obtained by the FT. The letter did not mention China, but “it urges the US government to consider this deficit trend as evidence of President Trump’s success in his first term in diversifying supply chains in the Indo-Pacific region. We urge the US to avoid retaliation and sector tariff measures for the logical outcomes of its own policy goals.”
The fee is a “significant problem” for US companies in Vietnam, as higher fees “negatively affect the broader commercial relationships between our members and our customers and our two countries.”
Vietnam is important to the supply chains of several American companies. It accounts for half of Nike’s footwear production. Nike plans to raise prices due to customs duties. Analysts hope that Apple will source two-thirds of its AirPods from Vietnam by the end of the year.
Lobbying by American companies comes as countries around the world rush to finalise their contract with the US before the 90-day suspension of tariffs ends on September 9th. US and Vietnamese officials are expected to meet in third round talks by mid-June, according to Hanoi.
Tariffs of 46% are devastating for Vietnam’s economy, as the US accounts for nearly a third of total exports. It will also affect new foreign investments in Vietnam.
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Vietnam has pledged to buy more American products, including Boeing aircraft and liquefied natural gas, and remove non-tariff barriers for US companies. Recently, he approved the Trump organization’s golf project and held Eric Trump for a meeting at the new Trump Tower in Ho Chi Minh City.
However, one of the biggest pressure points from the US is the alleged transport of Chinese goods through Vietnam, and has pledged to increase scrutiny of such practices in recent weeks.
At a Senator’s hearing last week, Commerce Secretary Howard Lutnick said that even if Hanoi removes all tariff and non-tariff barriers on American products, Washington will not lift Vietnam’s taxes as it is a conduit for Chinese goods that is trying to avoid punitive US tariffs.
“They buy $90 billion from China and then mark it up and send it to us,” Rutnick said. “They are just China’s path for us.”
Vietnamese officials said they were responding with “resolve and goodwill” to issues raised by the US in trade negotiations last week.
New trade data could put more pressure on Vietnam. Hanoi’s surplus with Washington was the second highest in April, overtaking Mexico, according to US figures. Vietnam’s data showed that exports to the US continued to increase in May.
In a letter sent to the two governments, Amcham urged cooperation between Vietnamese customs authorities and the United States to address illegal transshipment.
It also urged Vietnam to quickly track American product purchases and implement reforms in some sectors. The Chamber of Commerce has recommended “full liberalization” of Vietnam’s electricity sector to attract investment.
“This will encourage Vietnam’s imports in US turbines, LNG facilities and fuels, wind infrastructure equipment, batteries and services.
