A screen grab of the online meeting between Minister of Industry and Trade Nguyen Hong Dien, United States Trade Representative Jamieson L. Greer, with the participation of the Vietnamese Embassy in the United States. — Ministry of Industry and Trade
HANOI: Vietnam and the US officially kicked off talks over the Trump administration’s threatened 46% tariff on goods from the nation, which is racing to take advantage of a 90-day reprieve on the levy.
A phone call between trade minister Nguyen Hong Dien and US Trade Representative Jamieson Greer set out the "principles, scope and roadmap of negotiations,” according to a post on the Vietnamese ministry’s website. Dien, who is the head of Hanoi’s trade negotiation team with the US, affirmed Vietnam’s readiness to tackle Washington’s concerns based on mutual interests, the ministry said.
The call between the top trade negotiators is the "most significant development so far,” according to Pham Luu Hung, chief economist at SSI Securities. It’s also "important to remain patient, as a swift resolution should not be anticipated.”
Vietnam, which last year had the world’s third-largest trade surplus with the US after China and Mexico, has repeatedly vowed to purchase more American goods such as LNG and aircraft, while offering to remove all tariffs on US imports.
It has also taken steps to target origin of goods fraud, as one of the Trump team’s key concerns is the issue of Chinese goods being shipped via Vietnam to sidestep tariffs.
Vietnam Airlines and Vietcombank announced the signing of a provisional deal to finance the purchase of 50 aircraft on Thursday (April 24), which could pave the way for the national carrier to make good on its 2023 commitment to purchase 50 Boeing Co. 737 Max aircraft.
Vietnam could also be preparing to purchase Lockheed F-16 fighter jets as part of a trade deal as it looks to reduce the US$123.5 billion trade gap, according to Bloomberg Intelligence analysts Eric Zhu and George Ferguson.
"Vietnam already showed interest in the fighter aircraft under the Biden administration but didn’t proceed due to geopolitical sensitivity with China and Russia. The aircraft would be purchased to replace its aged SU-22 fleet of around 40 aircraft,” they wrote in an April 15 report.
Prime Minister Pham Minh Chinh reiterated on Tuesday that the government is working to resolve issues of concern to the US, especially regarding origin of goods, and taking steps to combat smuggling, trade fraud, and counterfeit items.
But Vietnam’s government also needs to address the potential impact of tariffs on the domestic economy. While the Trump administration paused higher tariffs for most trading partners aside from China, it has imposed a 10% levy in its place.
More supporting measures from authorities could be introduced soon, SSI Securities’ Hung wrote in a Thursday note. Those could include preferential short-term lending to support businesses and steps to boost local consumption, he wrote.
Other South-East Asian nations are also seeking to avert high tariffs, with Malaysian Trade Minister Tengku Zafrul Aziz due to meet Greer in Washington on Thursday. Talks between Thailand and the US were delayed after Washington asked Bangkok to address a set of "issues.” - Bloomberg
