Hanoi: Vietnam will reduce tariffs on key US products and approve Starlink to balance trade and avoid US penalties.
Trade Surplus
Vietnam’s trade surplus with the US exceeded $123 billion last year, triggering concerns about possible US tariffs.
To address this, Vietnam introduced several measures, including increased imports, to balance trade relations with Washington.
The government will lower tariffs on American liquefied natural gas (LNG), automobiles, ethanol, and other key imports.
Vietnam has not yet imported LNG from the US but is negotiating deals for its upcoming LNG power plants.
The first two LNG power plants are expected to begin operations by June this year, expanding Vietnam’s energy sector.
Tariff Reductions
On Tuesday, Vietnam announced a decree to cut import duties on specific American products.
The tariff on US LNG will decrease from 5% to 2%, reducing costs for energy imports.
Automobile tariffs will drop to 32% from a previous range of 45% to 64%, making US cars more affordable.
Ethanol duties will fall from 10% to 5%, potentially benefiting Vietnam’s fuel market.
Additional tariff reductions will apply to imports like chicken thighs, almonds, apples, cherries, and wooden products.
Strategic Moves
Nguyen Quoc Hung, head of the Finance Ministry’s tax policy department, said the changes aim to improve trade balances.
He noted that although Vietnam and the US share a Comprehensive Strategic Partnership, they lack a formal trade agreement.
The government intends to finalize and implement the decree within this month.
Vietnam will also remove tariffs on ethane, further diversifying its import policies.
Analysts believe these steps could help Vietnam avoid new US tariffs targeting trade surplus nations.
Starlink Approval
Vietnam has approved a trial launch of SpaceX’s Starlink satellite internet service.
The government will retain full ownership of the service while allowing its deployment.
This decision is seen as a goodwill gesture to improve relations with the US.
Starlink’s launch could enhance internet connectivity, especially in remote areas of Vietnam.
The approval aligns with Vietnam’s broader economic and technological development strategy.
US Tariff Concerns
US President Donald Trump has warned of broad tariffs on countries with large trade surpluses.
On April 2, the US is expected to impose reciprocal tariffs on several trading partners.
Trump recently hinted that some nations might receive exemptions from the new trade measures.
Vietnam’s recent trade adjustments may help secure favorable treatment from Washington.
Experts say these proactive steps could reduce tensions and maintain stable economic ties.
