An overview of the seminar “U.S. Reciprocal Tariffs and Responses from Vietnamese Businesses” hosted by VCCI

Severe impact on exports

At the recent seminar “U.S. Reciprocal Tariffs and Responses from Vietnamese Businesses,” VCCI President Pham Tan Cong provided an in-depth analysis of the potential impact of the proposed tariff policy. He noted that the U.S. is Vietnam’s largest export market, accounting for over 29% of the country’s total export value in 2024. Key industries such as textiles, wood, electronics, footwear, seafood, machinery and equipment have export shares to the U.S. exceeding 40%, with some sectors like wood and textiles surpassing 50%. “If the 46% tariff is implemented, Vietnamese businesses will face severe losses: reduced market share, diminished competitiveness, disrupted production, job losses, and negative effects on GDP growth and macroeconomic stability,” he warned.

The tariff policy not only directly impacts exports but also triggers a ripple effect, as goods unable to enter the U.S. market may redirect to Vietnam, intensifying domestic competition. However, with strategic foresight, he asserted: “Within challenges lie opportunities. This is a critical moment for businesses to reassess their development strategies, strengthen internal capabilities and adapt to global trade volatility.”

According to Pham Tan Cong, VCCI has promptly outlined strategic solutions to support businesses. He proposed five key priorities, reflecting a long-term vision and proactive approach amid a challenging global trade environment:

First, regarding high-level strategic dialogue with the U.S., he emphasized the need for bilateral negotiations to reduce trade conflicts, improve transparency, and balance trade by increasing imports from the U.S., including LNG, agricultural products and high-tech goods. He stressed that building political trust is key to securing a lower tariff rate.

Second, on market and supply chain diversification, he urged businesses to leverage free trade agreements (FTAs) such as the EVFTA, CPTPP, and RCEP to expand into markets like the EU, Canada and Australia, while tapping into promising regions like the Middle East, Latin America and Vietnam’s domestic market of over 100 million consumers.

Third, on restructuring supply chains, he called for increasing localization rates, strengthening control over product origins, and developing supporting industries such as chemicals, new materials, logistics and high-tech to reduce dependence on imports.

Fourth, in joining the U.S. strategic supply chain, he highlighted opportunities to invest in semiconductors, green industries and renewable energy to become a reliable link in the global value chain. He affirmed this is a golden opportunity that Vietnam should actively seize.

Fifth, regarding institutional capacity and infrastructure, he emphasized the importance of improving the investment environment, ensuring policy transparency, upgrading human resources and modernizing logistics to help businesses enhance competitiveness and achieve sustainable growth.

“VCCI will compile the insights gathered here and submit them to the Party, Government, and relevant authorities to formulate policies that support businesses through this challenging period,” he stressed.

Solutions for businesses

Dau Anh Tuan, VCCI Vice Secretary-General and Director of the Legal Department, emphasized that businesses must proactively gather information, analyze risks and devise tailored solutions. “The key factors are competitiveness and risk management. Businesses need to collaborate with associations and the government to share information and propose policies,” he said.

He said VCCI has urged a delay and reduction of special consumption taxes, especially on sugary drinks, and emphasized the role of associations in U.S. negotiations and preventing trade fraud, particularly in seafood.

Nguyen Viet Ha, AmCham representative, revealed that VCCI and AmCham sent a joint letter to the U.S. Secretary of Commerce, urging a suspension of the tariffs to prevent disruptions to supply chains and bilateral business operations. With only 90 days for negotiations, Vietnam must take both tariff and non-tariff measures to achieve optimal outcomes. On tariffs, she proposed cutting import duties on 13 key U.S. product categories, including agricultural goods, machinery and high-tech items, to show goodwill and balance trade. On non-tariff measures, she recommended adjusting VAT, special consumption tax and technical standards, and avoiding new taxes or expanded taxable items during this sensitive time. 

The Vietnam Beer, Alcohol, and Beverage Association proposed postponing the special consumption tax and excluding sugary beverages from taxation. The association submitted a petition to the government, warning that imposing a special consumption tax on sugary beverages at this juncture would place significant pressure on domestic businesses. Moreover, it would adversely affect major U.S. companies like Coca-Cola and Pepsi, which have substantial investments in Vietnam, potentially escalating trade tensions and complicating negotiations over the reciprocal tariff. Deferring the tax would aid business recovery, sustain economic growth contributions, and facilitate smoother bilateral talks.

The Vietnamese government is implementing practical tax policies to nurture revenue sources and achieve an 8% growth target this year. Associations have recommended delaying and easing special consumption tax schedules and avoiding new taxable items to prevent hindering growth. Dau Anh Tuan stressed that businesses must urge the government to support trade promotion and market diversification with over 60 FTA partners. “Market diversification requires the state’s leadership, as individual businesses cannot achieve it alone,” he advised.

Pham Chi Lan, Senior Economist The U.S. reciprocal tariff policy presents significant challenges but also offers Vietnam an opportunity to reassess its long-term development strategy. Expanding into new markets is three times more expensive than maintaining existing ones like the U.S. This calls for a dual strategy: sustaining the U.S. market through effective negotiations while penetrating promising new markets. Businesses must play a critical role in providing transparent information on product origins, particularly amid growing U.S. concerns about origin circumvention through Vietnam. This transparency not only builds trust with partners but also strengthens Vietnam’s position in the global supply chain. Moreover, Vietnam must prioritize developing supporting industries, from raw material production to high-tech sectors like semiconductors and renewable energy. Only by increasing localization rates can Vietnam move beyond its role as a low-value-added processor and advance toward a sustainable, self-reliant economy. The upcoming negotiations with the U.S. are a chance for Vietnam to demonstrate its production capabilities, compliance with international standards, and reliability as a strategic partner. Businesses need to closely collaborate with the government and associations to provide data, statistics and compelling evidence to support the negotiation team in achieving the best outcomes. Tran Huu Huynh, Former President of Vietnam International Arbitration Center (VIAC) To address the reciprocal tariffs, Vietnam must focus on increasing localization rates within the supply chain, particularly for key export products like textiles, wood and seafood. Currently, many Vietnamese businesses rely heavily on imported materials, making them vulnerable to international trade policies including reciprocal tariffs. Developing supporting industries not only mitigates risks but also enhances the added value of Vietnamese goods, thereby bolstering global market competitiveness. Additionally, industry associations should play a stronger role, especially in developing high-quality human resources and establishing effective risk management systems. Businesses need support to understand the stringent U.S. market requirements, including technical standards and origin transparency. On the policy front, I propose that the government consider easing non-tariff barriers by adjusting timelines for special consumption and value-added taxes. Furthermore, public-private partnerships should be promoted to establish research and development (R&D) centers in strategic fields like high-tech, renewable energy and semiconductors. These efforts will help Vietnam meet U.S. requirements and strengthen its position in the global supply chain. Can Van Luc, Member of the National Financial and Monetary Policy Advisory Council The U.S. reciprocal tariff policy poses challenges but also opportunities to drive economic restructuring toward greater sustainability. Businesses should make full use of tax, fee and credit support to optimize costs, especially amid rising production and logistics pressures. I emphasize the dual transformation toward green and digital practices aligned with ESG standards, as these are essential requirements in developed markets like the U.S, EU and Japan. Businesses need to develop long-term strategies focusing on diversifying markets, partners, supply chains, products, services and capital sources to reduce dependence on the U.S. market. Transparency in product origin is critical, especially as the U.S. tightens origin regulations to prevent tax evasion. Simultaneously, businesses should effectively utilize new-generation free trade agreements like EVFTA, CPTPP and RCEP to expand export opportunities to markets such as the EU, Canada, Australia and ASEAN. On the government’s part, I commend the efforts to address the 24 concerns across 14 sectors raised by the U.S. Department of Commerce regarding Vietnamese goods. However, additional targeted support measures are needed for heavily impacted sectors like wood, textiles and seafood, including preferential credit packages and trade promotion assistance. Given limited market diversification options, stimulating private investment and domestic demand is crucial to sustaining economic growth momentum. I recommend that the government intensify stimulus policies, such as temporarily reducing value-added tax or extending tax incentives for businesses. Enhancing comprehensive competitiveness, from technology and human resources to risk management, will enable Vietnam to overcome current challenges and solidify its position in the global value chain.