Vietnamese Prime Minister Pham Minh Chinh expressed confidence on Wednesday that Vietnam and the United States would reach a trade agreement before early July, when a temporary pause on steep 46% reciprocal tariffs is set to expire.

Speaking at the World Economic Forum in Tianjin, China, during a panel titled “Is Asia’s Century at Risk?”, PM Chinh emphasized ongoing diplomatic efforts and frequent communications between Hanoi and Washington on trade-related issues.

“I believe you will see a result even sooner than two weeks,” Chinh said. “Vietnam and the U.S. have a strong mutual understanding when it comes to tariffs. I’m hopeful that positive outcomes are on the horizon.”

Avoiding a Trade Setback

Vietnam, a key manufacturing powerhouse in Southeast Asia, is aiming to avoid the reinstatement of the 46% tariff, which had previously been imposed due to the country’s significant trade surplus with the U.S.

Negotiations between the two countries have been ongoing, with the most recent round concluding last week. Sources indicate the U.S. has submitted a list of trade demands to Vietnam—described by Vietnamese officials as “tough”—including pressure to reduce reliance on Chinese technology in goods assembled in Vietnam and exported to the U.S.

Trade Surplus Hits Post-Pandemic High

Vietnam’s trade surplus with the United States reached $12.2 billion in May, a 42% year-on-year increase and a 17% jump from April, according to government statistics. Exports to the U.S. soared to $13.8 billion, marking a post-pandemic peak.

This trade imbalance has attracted scrutiny from Washington, prompting the Biden administration to call for stronger oversight of trans-shipment practices, particularly where Chinese-origin goods are disguised as Vietnamese exports.

Vietnam’s Concessions and Strategic Moves

In response, Vietnam has taken steps to tighten control over illegal trans-shipment and signaled its willingness to ease non-tariff barriers. Hanoi has also expressed interest in boosting imports of U.S. goods, including aircraft, agricultural products, and energy supplies—though no official agreements have been signed yet.

While trade tensions remain, both sides appear eager to avoid a breakdown that could disrupt billions in bilateral commerce.

“Vietnam’s proactive engagement reflects its broader strategy to strengthen ties with the U.S. while balancing its global trade relationships,” said an official familiar with the negotiations.

Vietnam Insider will continue to monitor developments as the July deadline approaches.

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Source: Vietnam Insider