Vietnam kicks off trade talks with US as plane deal takes shape

HANOI - Vietnam and the US officially kicked off talks over the Trump administration’s threatened 46 per cent tariff on goods from the South-east Asian nation, which is racing to take advantage of a 90-day reprieve on the levy.

A phone call between Trade Minister Nguyen Hong Dien and US Trade Representative Jamieson Greer set out the “principles, scope and road map of negotiations”, according to a post on the Vietnamese ministry’s website.

Mr Dien, who is the head of Hanoi’s trade negotiation team with the US, affirmed Vietnam’s readiness to tackle Washington’s concerns based on mutual interests, the ministry said.

The call between the top trade negotiators is the “most significant development so far”, according to SSI Securities chief economist Pham Luu Hung. It is also “important to remain patient, as a swift resolution should not be anticipated”.

Vietnam, which in 2024 had the world’s third-largest trade surplus with the US after China and Mexico, has repeatedly vowed to purchase more American goods such as liquefied natural gas and aircraft, while offering to remove all tariffs on US imports. It has also taken steps to target origin of goods fraud, as one of the Trump team’s key concerns is the issue of Chinese goods being shipped via Vietnam to sidestep tariffs.

Vietnam Airlines and Vietcombank announced the signing of a provisional deal to finance the purchase of 50 aircraft on April 24, which could pave the way for the national carrier to make good on its 2023 commitment to purchase 50 Boeing 737 Max aircraft.

Vietnam could also be preparing to purchase Lockheed F-16 fighter jets as part of a trade deal as it looks to reduce the US$123.5 billion (S$162.2 billion) trade gap, according to Bloomberg Intelligence analysts Eric Zhu and George Ferguson. 

“Vietnam already showed interest in the fighter aircraft under the Biden administration but didn’t proceed due to geopolitical sensitivity with China and Russia. The aircraft would be purchased to replace its aged SU-22 fleet of around 40 aircraft,” they wrote in an April 15 report.

Prime Minister Pham Minh Chinh reiterated on April 22 that the government is working to resolve issues of concern to the US, especially regarding origin of goods, and taking steps to combat smuggling, trade fraud and counterfeit items. 

But Vietnam’s government also needs to address the potential impact of tariffs on the domestic economy. While the Trump administration paused higher tariffs for most trading partners aside from China, it has imposed a 10 per cent levy in its place. 

More supporting measures from the authorities could be introduced soon, SSI Securities’ Mr Hung wrote in a note on April 24. Those could include preferential short-term lending to support businesses and steps to boost local consumption, he wrote. 

Other South-east Asian nations are also seeking to avert high tariffs, with Malaysian Trade Minister Zafrul Aziz due to meet Mr Greer in Washington on April 24. Talks between Thailand and the US were delayed after Washington asked Bangkok to address a set of “issues”. BLOOMBERG