Vietnam, U.S. Enter Second Round of Tariff Talks in Washington Amid Growing Trade Pressures

(Vietnam Insider) – Vietnam and the United States have kicked off a crucial second round of trade negotiations in Washington this week, with both sides working to resolve escalating tensions that could result in a steep 46% U.S. tariff on Vietnamese goods—a move that could significantly impact Vietnam’s export-led economy.

The talks, which began on Monday and will continue through May 22, follow an initial round held earlier this month. According to Vietnam’s Ministry of Industry and Trade, the discussions aim to resolve “fundamental issues of mutual concern” and accelerate progress toward a bilateral trade agreement.

Trade Minister Nguyen Hong Dien is leading the Vietnamese delegation, which includes representatives from key economic sectors such as construction, agriculture, and technology, as well as officials from the State Bank and Ministry of Finance.

Tariff Tensions and Economic Stakes

The stakes are high: the United States has postponed the imposition of a 46% tariff on Vietnamese imports until July, applying a temporary 10% rate instead. If the higher tariff is enforced, it could deal a severe blow to Vietnam’s manufacturing sector, which relies heavily on U.S. demand. In 2024, Vietnam recorded a trade surplus of over $123 billion with the U.S.—its largest export market.

The potential tariff is part of a broader effort by Washington to address what it sees as trade imbalances and circumvention of duties, particularly involving goods transshipped through Vietnam from China.

In response, Hanoi has taken steps to reduce its surplus, including tightening controls on Chinese-origin goods passing through its borders and boosting purchases of American products. These actions are seen as strategic moves to demonstrate goodwill and rebalance trade flows ahead of the July deadline.

Beyond Tariffs: Nuclear and Energy Cooperation

The trade talks have also opened the door to discussions beyond tariffs. On Monday, Minister Dien met with U.S. power company Westinghouse to discuss cooperation in nuclear energy—a potential revival of Vietnam’s long-paused nuclear ambitions. While Westinghouse has not yet commented on the meeting, the engagement signals Vietnam’s intention to diversify its energy portfolio amid rising industrial demand.

In a parallel development, the Ministry of Finance announced that PetroVietnam, the country’s state energy giant, plans to increase crude oil imports from ExxonMobil. Additionally, leading Vietnamese corporations in rubber and maritime logistics are exploring opportunities to establish facilities in the United States, underscoring deeper economic integration.

Outlook: Strategic Balancing Act

This second round of trade talks comes at a critical moment as Vietnam navigates its strategic balancing act between maintaining strong economic ties with the U.S. while managing its complex trade dynamics in the region. Minister Dien also met with U.S. Trade Representative Jamieson Greer last week in South Korea on the sidelines of an APEC meeting, underscoring the frequency and urgency of bilateral dialogue.

“As Vietnam continues to attract global manufacturers and position itself as a key supply chain hub, the outcome of these negotiations could set the tone for future trade cooperation—and define how Vietnam adapts to shifting geopolitical and economic pressures.” Sophie Dao, Senior partner at GBS told Vietnam Insider.

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Source: Vietnam Insider