HANOI (Bloomberg): Vietnam’s finance ministry has put forward a proposal to cut preferential import tariffs on a range of products including LNG, cars, wood, and agricultural products, as the nation seeks to avoid the imminent threat of US tariffs.
Under the changes, tariffs on some types of cars are set to be cut to 32% from a range of 45% to 64%, the tax on LNG will be reduced to 2% from 5% and ethanol will see a cut to 5% from 10%.
Agricultural goods including apples, frozen chicken, almonds and sweet cherries will also see a reduction, according to a statement on the ministry’s website, citing Nguyen Quoc Hung, director of the tax management and supervision unit.
The draft regulatory changes are "to navigate the complex and unpredictable developments in the global geopolitical and economic situation,” with tariff policies "significantly” affecting world economies including Vietnam, the statement said.
Vietnam has been seeking to shore up trade ties with the US and convince the Trump administration it’s serious about addressing its trade surplus, which widened to $123.5 billion last year, giving it the third-highest trade gap with the US, behind China and Mexico.
The South-East Asian nation announced provisional deals with US companies worth US$4.15 billion during a visit by the trade minister to the US earlier this month, and said it was considering removing trade barriers and cracking down on export fraud.
"Vietnam takes the Trump administration’s threats concerning tariffs seriously, even if China seems to be the main target in Asia,” according to Petri Deryng, portfolio manager of PYN Elite Fund.
"Still, the country does have a surprising number of tariffs on goods imported from the US,” he wrote in a March 24 note.
The revised decree on the most favored nation, or MFN, tariff adjustments is expected to be issued within this month, according to the ministry statement.
"It is essential to adjust the MFN import tariff rates for certain goods to ensure fair treatment among Vietnam’s comprehensive strategic partners,” the statement said.
Vietnam and the US have been gradually expanding cooperation since the two nations upgraded bilateral ties to a comprehensive strategic partnership in 2023.
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