In a move to mitigate potential trade tensions with the United States, Vietnam has announced plans to reduce tariffs on a range of U.S. products, including liquefied natural gas (LNG), automobiles, and various agricultural goods. This decision comes as a proactive measure ahead of anticipated reciprocal tariffs from the Trump administration, set to be announced on April 2.
Details of the Tariff Reduction
- Liquefied Natural Gas (LNG): The import duty on U.S. LNG will be reduced from 5% to 2%, aiming to boost energy imports and diversify Vietnam’s energy sources.
- Automobiles: Tariffs on U.S. cars will be lowered from the current range of 45%-64% to 32%, potentially making American vehicles more competitive in the Vietnamese market.
- Ethanol and Ethane: The tariff on ethanol will decrease from 10% to 5%, and duties on ethane will be completely removed, facilitating increased imports of these energy products.
- Agricultural Products: Tariffs on various American agricultural imports, such as chicken thighs, almonds, apples, cherries, and wooden products, will also see reductions, promoting greater agricultural trade between the two nations.
In addition to tariff reductions, Vietnam has authorized SpaceX to trial its Starlink satellite internet service in the country. This move is perceived as an effort to strengthen technological ties with the U.S. and showcase Vietnam’s commitment to enhancing its digital infrastructure.
These measures are part of Vietnam’s broader strategy to address its substantial trade surplus with the United States, which exceeded $123 billion last year. By reducing tariffs and opening its market to U.S. products and services, Vietnam aims to alleviate trade imbalances and avert potential punitive measures from the U.S. administration.
The timing of these announcements aligns with President Donald Trump’s anticipated declaration of reciprocal tariffs on certain countries, including Vietnam, on April 2. Vietnam’s proactive approach reflects its intent to maintain favorable trade relations and mitigate any adverse economic impacts from potential U.S. tariffs.
