Thayer Vietnam Offers To Cut Tariffs On U.S. Goods To Zero Percent
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Carlyle Alan ThayerThayer Vietnam Offers To Cut Tariffs On U.S. Goods To Zero Percent
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Carlyle Alan ThayerThayer Consultancy Background Briefing:
ABN # 65 648 097 123
[email protected] Vietnam Offers to Cut Tariffs on
U.S. Goods to Zero Percent
Carlyle A. Thayer
April 5, 2025
We request your assessment of General Secretary To Lam's phone conversation with
President Donald Trump
Q1. Do you see any tangible outcomes following the phone conversation between the
two leaders?
ANSWER: Vietnam has been working hard for some time to craft a response to
Trump’s threat to impose tariffs. Vietnam was undoubtedly surprised when Trump
imposed a hefty 46% tariff on all Vietnamese goods giving an advantage to
competitors such as India, Thailand and Malaysia in the textile, footwear and
electronic goods sectors. In one move, Trump threatened Vietnam’s goal of reaching
8% growth in GDP next year needed to boost Vietnam to a middle income country by
2030.
Prior to Trump’s Liberation Day tariffs, Vietnam already announced it was removing
tariffs on certain American goods and would increase its purchases of LNG, and
airplanes. Vietnam also hosted a delegation of nearly sixty American companies to
discuss investment opportunities.
Prior to the conversation between President Donald Trump and General Secretary To
Lam, Vietnam requested a three-month delay in imposing the tariffs in order to give
time for negotiations. That request was likely to go nowhere.
It is significant that President Trump took General Secretary To Lam’s phone call in the
first place. Lam’s offer to cut all tariffs to zero percent led Trump to describe the
conversation as “very productive.” Trump and Lam reached verbal agreement to hold
discussions on this issue.
Vietnam was already preparing to dispatch its Deputy Prime Minister Ho Duc Phoc to
Washington. Minister Phoc’s visit will be timely as To Lam has already laid Vietnam’s
cards on the table – zero tariffs on American goods, including agricultural products,
hefty increases in Vietnamese purchases from the U.S. such as Boeing aircraft, and
investment opportunities for U.S. companies in high-tech and critical minerals in
Vietnam.
Q2. How significant is the call given that it comes on the heels of hefty tariffs that the
U.S. has imposed on Vietnam?
2
ANSWER: Before the phone call between President Donald Trump and General
Secretary To Lam the question was whether Trump’s Liberation Day tariffs were
negotiable or non-negotiable. Now we know. Trump’s tariffs are negotiable. This will
have a major positive impact on the market.
This development is hugely significant because Vietnam has the third largest trade
surplus following China and Mexico. Vietnam gets to benefit because it is the first
mover. Vietnam is a major trade partner with the China, European Union, Japan and
South Korea.
The pressure now will be on other countries to follow suit and if a cascade develops
this will strengthen Trump’s hand in dealing with China and the EU.
Suggested citation: Carlyle A. Thayer, “Vietnam Offers to Cut Tariffs on U.S. Goods to
Zero Percent,” Thayer Consultancy Background Brief, April 5, 2025. All background
briefs are posted on Scribd.com (search for Thayer). To remove yourself from the
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.
