By Cadys Wang    Photo：CANVA

On April 2, President Trump announced reciprocal tariffs on imports from approximately 90 countries, surpassing the existing 10% across-the-board tax on U.S. imports. Dubbed "Liberation Day," he claimed that these new taxes were necessary to eliminate trade deficits between the U.S. and various nations, from China to the European Union.

However, on April 9, President Trump partially reversed his position, announcing a 90-day pause on the reciprocal tariffs and lowering the tariff rate to 10% for nearly all countries.

Before the pause was implemented, Kathy Bostjancic, Chief Economist at Nationwide, noted that Asian nations would have been most affected, with Cambodia facing a 49% tariff and Vietnam a 46% tariff.

Over the past two years, Southeast Asian nations have alternated between aligning with the U.S. and China, influenced by the shifting dynamics of global trade and each country's confidence in the commitment of these two global powers to free trade principles.

According to Vietnam's Ministry of Industry and Trade (MIT), the U.S. has been Vietnam's largest export market for years.

A thorough analysis of U.S. trade deficits with Vietnam highlights a remarkable and consistent upward trend since the onset of the U.S.-China trade war in 2018. In light of this, many companies are enthusiastically exploring Vietnam as a viable alternative production hub, aiming to diversify their operations and reduce their exposure to ongoing U.S.-China trade tensions.

Vietnam proudly stands as the 8th largest trading partner of the United States, contributing 4.13% to the total export turnover. In 2024, Vietnam's exports to the U.S. achieved an impressive US$119.5 billion, reflecting 29.5% of the nation’s overall export total. Notably, 16 categories of goods each surpassed US$1 billion, highlighting the robust trade relationship and exciting growth opportunities ahead!

However, in my earlier blog post, "The China Plus One Strategy Is No Longer Viable for Businesses," I highlighted how Vietnam—a communist nation—emerged as a primary beneficiary during Trump’s first presidency when the U.S. imposed heavy tariffs on mainland China. Given this, it's no surprise that many ASEAN countries are now facing high tariff rates in the current reciprocal tariff strategy.

Notably, Indonesia, Malaysia, and Singapore were the only ASEAN nations where distrust of the U.S. surpassed trust. These three countries also have the highest perceived contributions to ASEAN, indicating their significant influence in shaping the region's consensus.

In recent years, Vietnam has diversified its economy significantly. The country now has free trade agreements with most major global economies, including the EU, Japan, South Korea, the UK, and ASEAN nations. With strong export demand from Southeast Asia and Europe, businesses are increasingly eager to expand their presence in these markets. By embracing economic diversification and developing emerging markets across Southeast Asia and Europe, Vietnam and its ASEAN partners are better positioned to navigate U.S. trade policy volatility and sustain long-term growth.

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