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With a July 9 deadline looming for the reimposition of sweeping U.S. tariffs, Vietnam’s Prime Minister Pham Minh Chinh signaled “positive” developments in ongoing trade negotiations with Washington, stating that an agreement could be reached before the two-week deadline. Speaking at the World Economic Forum’s Summer Davos in Tianjin, Chinh projected cautious optimism while underscoring Vietnam’s strategic balancing act between the United States and China.
The U.S. currently plans to impose 46% duties on Vietnamese goods, a significant escalation in the tariff regime initially launched under former President Donald Trump. Vietnam, whose export-led economy relies heavily on access to the U.S. market, has been a focal point of Washington’s broader concerns regarding tariff circumvention via Chinese supply chains.
“We would arrive at something positive … that will bring about benefits to the U.S., to American consumers, to us, and to all countries around the world,” Chinh told global stakeholders.
Balancing Two Giants: Vietnam’s Diplomatic Calculus
Vietnam’s position is complicated by its deep trade ties with both superpowers. While the U.S. is its largest export market, China remains its largest import partner and a crucial source of raw materials and investment. The U.S. has accused Hanoi of acting as a transshipment point for Chinese goods attempting to bypass tariffs—an allegation that has intensified pressure on Vietnamese compliance and transparency in customs and origin-tracking procedures.
In response, Vietnamese officials are reportedly offering to:
- Increase purchases of U.S.-made Boeing aircraft
- Accept tariff rates reduced to 20–25%, down from the proposed 46%
- Finalize a broader trade framework with the U.S.
Vietnam’s top leader, Communist Party chief To Lam, is expected to visit Washington to solidify the deal.
Strategic Diversification and Supply Chain Insurance
Chinh reiterated Vietnam’s commitment to diversifying markets, supply chains, and production capabilities—a signal to multinationals that the country remains a stable and forward-thinking partner amidst global geopolitical volatility.
“We need to have room to manoeuvre,” Chinh said, adding that Vietnam is focused on “address[ing] one issue without spoiling another.”
His message echoes the ASEAN region’s wider response to the growing bipolar trade environment: maximize flexibility, reduce dependency, and maintain agency.
Implications for Multinationals and Trade Advisors
For multinationals with regional operations, Vietnam’s current positioning offers both risk and opportunity:
- Tariff sensitivity may increase sourcing costs or create uncertainty in medium-term planning.
- Geopolitical neutrality makes Vietnam a potential hedge market against U.S.-China volatility.
- Any agreement reducing the 46% tariff would significantly impact transfer pricing, supply chain strategies, and cross-border tax exposure.
- As both the U.S. and China deepen their economic influence in Southeast Asia, companies must prepare for dual-track compliance strategies, particularly those involved in indirect tax, customs valuation, and digital trade protocols.
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