HANOI: US President Donald Trump has announced plans for tariffs that could virtually hit all Vietnam's goods exports to its top market, worth last year more than US$142 billion, according to United Nations data, about 30 per cent of Vietnam's gross domestic product.
As the South-East Asian nation has one of the largest surpluses with the US and meets several criteria for potential reciprocal tariffs, Vietnamese officials and foreign companies are taking the threats seriously. Most US manufacturers in the country are expecting disruptions and forced layoffs if duties are imposed, according to a survey.
Below are some of the measures Vietnamese officials have flagged, are considering or that may help dodge tariffs:
DUTIES, NON-TRADE BARRIERS
Many economists agree Vietnam's levies on US products are higher than duties the US charges. It also charges value added tax on goods. Both are criteria for Trump's possible reciprocal tariffs.
The country has signalled an openness to find compromises but lowering duties on US goods may force Vietnam to reduce them also on other trade partners under existing regulations.
US companies have also long raised concerns about non-trade barriers, including lengthy project approval procedures, cumbersome legal requirements and hurdles for workers' visas.
ENERGY IMPORTS
Vietnamese officials have repeatedly discussed with US counterparts possible purchases of US liquefied natural gas for Vietnam's fledgling LNG industry, but no concrete steps have been taken yet, officials have said.
The country is also planning to re-launch its nuclear power programme and is looking for suppliers of nuclear energy technology.
AGRICULTURE GOODS
Vietnam's trade minister has said it is open to import more US farm products. A rise in agriculture imports is unlikely to significantly correct trade imbalances as Vietnam's total imports of farm products from the US last year totalled US$3.4 billion.
TRANSHIPMENT, STEEL
Vietnam has long been suspected of being a transhipment hub for Chinese goods to the US given the huge volumes of intermediate goods it imports from China. For some products such as solar panels it has already been sanctioned.
Last week, Vietnam decided to impose temporary anti-dumping duties on Chinese steel products, as it faces risks of 25 per cent tariffs on its steel exports to the US on top of anti-dumping duties Washington already levies on Vietnamese steel.
DEFENCE, STARLINK
Hanoi has been in talks with US defence firms for the possible purchase of security equipment, with negotiations at an advanced stage for Lockheed Martin C-130 Hercules military transport planes, according to officials with knowledge of the matter.
Earlier in February, the Vietnamese parliament approved the legal framework for a pilot scheme that could allow Elon Musk's Starlink to provide satellite internet and security services in Vietnam.
PLANES
Vietnamese budget carrier VietJet agreed to buy 200 Boeing 737 MAX jets in a multi-billion dollar deal first signed in 2016 and revised afterwards.
No plane has yet been delivered although the company had said it expected to receive the first jets last year. It has also shown interest in expanding the deal without detailing how.
MONETARY POLICY
Trump ended his first term in the White House with Treasury declarations of Vietnam as currency manipulator.
The country is currently on the US watchlist for possible manipulations. In recent months, the central bank has allowed the Vietnamese dong to weaken against the dollar and the country's bold growth targets may signal the intention to tolerate an even weaker currency, said Adam Samdin at Oxford Economics.
The exchange rate has, however, remained within the allowed flexibility and the central bank has said it would monitor and adjust to Trump's policies.
GOLF DIPLOMACY
The Trump Organisation has agreed to develop a US$1.5 billion golf course in Vietnam, its local partner said in October. - Reuters
