Vietnam’s hovering US commerce surplus stokes new fears of Trump tariffs

By Francesco Guarascio

HANOI (Reuters) – Vietnam is susceptible to turning into the brand new Trump administration’s subsequent goal for tariffs as knowledge reveals its commerce surplus with the US ballooning, trade executives and analysts mentioned.

The Communist-run nation, dwelling to giant industrial operations of U.S. multinationals comparable to Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL), Nike (NYSE:NKE) and Intel (NASDAQ:INTC), has the fourth highest industrial surplus with the US, topped solely by China, the European Union and Mexico. 

U.S. commerce knowledge launched on Thursday confirmed the nation’s deficit with Vietnam reached $102 billion within the first ten months of this 12 months, almost a 20% improve over the identical interval in 2023. 

“For Trump the primary metric is the commerce deficit, and the Vietnam quantity is dangerous,” mentioned Deborah Elms, head of commerce coverage on the Asia-based Hinrich Basis.

“Vietnam is a perfect candidate for early motion as a result of it can’t simply retaliate,” she mentioned.

President-elect Donald Trump, who takes workplace in January, threatened tariffs of as much as 20% on all U.S. imports throughout his election marketing campaign.

His son Eric, a high adviser, has cited Vietnam amongst nations that “ripped off” the U.S., based on a video proven final week at a enterprise convention in Hanoi organised by American chambers of commerce.

On the occasion a number of businessmen and commerce affiliation representatives expressed concern about potential tariffs on Vietnam.

“The brand new tariffs are one of many largest issues for the Korean trade in Vietnam,” Hong Solar, head of South Korea’s chamber of commerce in Vietnam, instructed the convention. South Korea’s Samsung Electronics (KS:005930) is a significant exporter of smartphones and digital gadgets to the U.S. from Vietnam

Vietnam’s overseas affairs ministry didn’t reply to a request for touch upon potential tariffs, however Vietnamese officers have repeatedly urged Washington to keep up seamless commerce.

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In one other signal Vietnam may face tariffs, Trump picked Peter Navarro to be his senior counselor for commerce and manufacturing.

Navarro has mentioned tariffs on Vietnam can be extremely efficient in reducing the U.S. commerce deficit, writing within the Undertaking 2025 proposals seen by many policymakers in Washington as a blueprint for the brand new Trump administration.

“Navarro has been a well known skilled underneath the Trump administration for rising the scale of the American manufacturing sector, imposing excessive tariffs, and repatriating international provide chains,” mentioned Nguyen Hung, a specialist in provide chains at RMIT College Vietnam.

Vietnam benefited from commerce limitations Trump imposed on Beijing in his first time period, which spurred producers to shift manufacturing out of China.

With almost one-third of Vietnam’s exports now going to the U.S., the nation would wish to enhance the traceability of products and elements to dispel issues of getting used merely as an assembling web site for merchandise made in China, Hung mentioned.

The nation may partly offset its giant commerce surplus by boosting its imports from the U.S., together with presumably liquefied pure gasoline (LNG), medication and airplanes, officers have mentioned. 

Nonetheless, it’s unclear whether or not Vietnamese authorities help these offsetting measures and the way important they could possibly be.

“I do not suppose Vietnam is able to purchase rapidly and sufficient” to materially cut back its surplus, mentioned Elms of the Hinrich Basis.