Vietnamese Deputy Prime Minister Ho Duc Phoc, accompanied by an entourage of Vietnamese business executives, announced an emergency trip to Washington on Wednesday — the day President Donald Trump revealed his “Liberation Day” tariff schedule which included a 46 percent duty on imports from Vietnam.
The Vietnamese delegation is scheduled to arrive on Sunday and remain in Washington until April 14, when it will pay an official visit to Cuba.
In addition to serving as deputy prime minister, Ho Duc Phoc also oversees the Vietnamese finance ministry and state banks. He will be accompanied by executives from companies such as Vietnam Airlines JSC and the VinaCapital Group. The delegation hopes to meet with officials from comparable American industries including Boeing and major U.S. banks.
“The business community hopes that the Government’s prompt response, along with the Deputy Prime Minister’s visit, will pave the way for negotiations leading to a more balanced agreement — easing the burden on businesses amid the current tough business landscape,” the Saigon Times reported on Thursday.
The trip was actually planned before Trump revealed his tariff plans on Wednesday, according to Bloomberg News, which quoted Vietnamese analysts who anticipated a “reciprocal tariff level” of about ten percent. The rate of 46 percent revealed on Wednesday appears to have come as an unwelcome surprise in Saigon, which previously reduced some of its own import levies and made promises to buy more American products to make a favorable impression on President Trump.
“Vietnam is among the world’s most trade-dependent nations, with exports equivalent to about 90% of economic output, and counts the U.S. as its most significant customer. Sales have surged since the trade war that broke out during Trump’s first term, when businesses sought to relocate away from China and Vietnam became an alternative base for production aimed at American markets,” Bloomberg News noted.
American customers buy about a third of what Vietnam exports, creating a massive trade surplus of over $123 billion. This appears to have factored into the tariff rate revealed by President Trump on Wednesday.
Vietnam was one of the most popular choices for “de-risking,” a strategy adopted by many international corporations that stopped a bit short of completely “de-linking” from China after the Wuhan coronavirus pandemic. The idea was to diversify supply chains so companies were not entirely dependent on China for raw materials or manufacturing.
China was still enraged by de-risking, but not as much as it would have been by companies pulling their supply chains completely out of China, and de-risking is not as difficult to reverse.
The New York Times (NYT) reported on Thursday that the size of Trump’s tariffs against Vietnam and its de-risking neighbors Cambodia, Indonesia, and Thailand came as a “shock” to analysts. Cambodia was hit by an even higher 49 percent rate, while Indonesia and Thailand got 32 percent and 36 percent, respectively.
Given the intensity of President Trump’s criticism of China, the Asian alternatives had expected more lenient treatment.
“I was horrified when I saw the tariff numbers on the chart. We can only hope that the Vietnamese government can help us weather this tsunami,” said Hong Sun, the chair of a South Korean business association in Vietnam that includes Korean electronic giants Samsung and LG.
“I was planning on moving more product to Thailand. I was looking at it as a next bet. That has been disrupted,” said American businessman Patrick Soong, whose clients were eager to find alternatives to China after Trump was re-elected in 2024.
According to the NYT, Vietnamese Prime Minister Pham Minh Chinh held an emergency cabinet meeting on Thursday to formulate a response to the tariffs. The deputy prime minister and his delegation will presumably attempt to implement some of the cabinet’s recommendations during their visit to the U.S. this weekend.
One of the major companies that looks to be hit hardest by the tariffs is Nike, which produced about half of its footwear and 28 percent of its other apparel in Vietnam last year. Nike shares plunged by 13 percent in trading on Thursday morning.
Competitors like Adidas and Lululemon are not far behind in their reliance upon Vietnamese manufacturing after the “de-risking” shift of the post-pandemic years, but Nike is in particularly vulnerable shape at the moment due to slipping market share. On the other hand, some of Nike’s upstart competitors are arguably even more exposed to the tariffs on Vietnam, and less able to adjust their manufacturing plans or absorb higher costs.
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