The Impact of US Trade Tariffs on Vietnamese Exports: Understanding Trade Relations Under Trump 2.0

Vinex Official
3 days ago
4 min read

In August 2025, the United States officially imposed a 20 percent reciprocal trade tariff on all Vietnamese exports — marking a new era in bilateral trade. Although lower than the proposed 46 percent, this tariff still exceeds expectations and challenges Vietnam’s export-driven economy.

Under President Donald Trump’s second administration, this policy reflects the “Fair and Reciprocal Trade” agenda to balance trade benefits. For Vietnamese manufacturers, exporters, and foreign investors, these trade tariffs highlight the urgency of risk management, market diversification, and compliance with evolving US trade measures.

1. Overview of US–Vietnam Trade in 2024

According to the US Department of Commerce (ITA), bilateral trade reached US$149.6 billion in 2024 — a 20.4% increase year-on-year. The US remained Vietnam’s largest export market, while Vietnam ranked as the eighth-largest US trade partner.

Vietnam’s exports to the US: US$136.6 billion
US exports to Vietnam: US$13.1 billion
Vietnam’s trade surplus: US$123.5 billion (record high)

Vietnam’s key export categories include electronics (US$41.7B), machinery (US$28.8B), furniture (US$13.2B), footwear (US$8.8B), and apparel (US$8.2B) — underscoring strong manufacturing capacity but also revealing the trade imbalance prompting new trade tariffs.

2. Trump’s New Trade Tariff Framework

20% Reciprocal Tariff

Announced under the Fair and Reciprocal Trade Plan, the new tariff equalizes trade relations through country-specific duties. After 90 days of negotiation, the US finalized a 20% reciprocal tariff (effective August 7, 2025) following a temporary 10% baseline. Although this marks a partial concession, it still raises costs for Vietnamese exporters.

Section 232 Tariffs: Steel & Aluminum

On February 10, 2025, President Trump reinstated a 25% steel tariff and increased aluminum duties from 10% to 25%, effective March 12, 2025. Vietnam had already been subject to Section 232 since 2018. In 2024, the US imported 1.2 million metric tons of Vietnamese steel (US$1.13B), up 143% YoY. Aluminum exports fell slightly to US$142.9M (-1.7%), meaning the new 25% rate will hit smaller aluminum producers harder.

25% Auto Tariffs

A 25% tariff on imported automobiles and selected auto parts took effect in March 2025. Vietnam’s direct exposure is limited (exports worth ~US$1.1B), but indirect supply-chain effects could emerge as regional automakers shift assembly operations.

40% Transshipment Tariff

To prevent re-export of Chinese-origin goods via Vietnam, the US imposed 40% tariffs on identified transshipment items, including electronics, solar panels, and semiconductors. Firms with certified Vietnamese origin, substantial local value-addition, and transparent supply documentation will be better protected.

3. Why Vietnam Became a Target

Vietnam’s MFN tariff average is 5.1%, compared to 2.2% in the US, giving Washington grounds to claim asymmetry. Additional US concerns include:

Currency undervaluation and non-tariff barriers
Illegal timber sourcing (Section 301 review)
Large and persistent trade surplus

To reduce pressure, Vietnam may need to increase imports from the US — particularly agriculture, energy, and technology — or expand market access for American companies. Such steps could rebalance trade and open the path to tariff reductions.

4. Impact of Trade Tariffs on Key Vietnamese Industries

4.1 Textiles, Footwear & Furniture

Short term: lower orders and reduced competitiveness vs. Indonesia or Bangladesh.
Medium term: potential relocation of manufacturing.
Long term: encourages Vietnam to shift from contract manufacturing to branded, high-value production.

4.2 Steel & Aluminum

Steel faces moderate impact as tariffs remain unchanged at 25%, while aluminum jumps from 10% to 25%, tightening profit margins for SMEs.

4.3 Electronics & Machinery

Vietnam’s largest export category (US$41.7B) faces risks from the 40% transshipment tariff. Firms with localized production and clear rules-of-origin documentation will maintain competitiveness.

4.4 Automotive & Parts

Though small in total volume, Vietnam’s parts manufacturers could be indirectly affected through regional supply-chain realignment.

5. Trade Tariffs as Taxes on Imported Goods

Essentially, trade tariffs function as taxes on imported goods, influencing both producers and consumers through four main channels:

5.1 Higher import costs → reduced margins

5.2 Price inflation → lower consumer demand

5.3 Investment delays → uncertainty in capital spending

5.4 Supply-chain reorganization → transitional inefficiencies

6. Trade Tariffs and Global Growth

The rise in trade tariffs has caused multiple global growth downgrades. World real GDP growth for Q4 2025 is projected at 1.4% (down from 2.1%). Vietnam’s exporters must now prioritize cost control, efficiency, and diversification to remain resilient amid these global trade shifts.

7. Strategic Guidance for Vietnamese Exporters

7.1 Diversify Markets and Supply Chains

Expand trade with Europe, the Middle East, and ASEAN. Adopt digital trade tools and multimodal logistics to optimize delivery timelines.

7.2 Increase Local Value Addition

Strengthen local sourcing and processing to meet FTA rules of origin and qualify for lower duties.

7.3 Enhance Trade Compliance

Keep detailed records of imports, HS codes, and supplier documentation. Prepare for possible US Customs (CBP) audits on transshipment risks.

7.4 Engage in Policy Dialogue

Industry associations should collaborate with both governments to seek tariff adjustments or exemptions in key sectors (agriculture, digital economy, energy).

7.5 Leverage FTAs and Regional Integration

Capitalize on CPTPP, EVFTA, and RCEP to reduce reliance on the US market and expand regional investment.

8. Outlook: Negotiation and Adjustment

Despite higher trade tariffs, the US and Vietnam remain constructive partners. Vietnam’s Ministry of Industry and Trade has expressed readiness to narrow the trade surplus and encourage US investment in semiconductor, energy, and aviation projects. If Vietnam demonstrates continued compliance and goodwill, tariff reductions may follow within 12 months.

In the meantime, exporters should build flexibility, legal preparedness, and scenario-based planning to adapt to short-term disruptions.

9. Conclusion: Turning Policy Risk into Strategic Readiness

The 20% reciprocal trade tariff under Trump’s second term is both a challenge and a catalyst. Businesses that modernize operations, enhance documentation, and diversify trade partners will not only survive but gain an advantage. At Vinex, we see tariff changes not as roadblocks, but as drivers of strategic transformation for sustainable growth.

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