Vietnam eyes tariff deal soon, as US seeks to cut huge trade deficit

HANOI - Vietnam is working to sign a trade agreement with the United States soon, Deputy Prime Minister Bui Thanh Son said on Nov 12, as a new round of negotiations gets under way in Washington. 

In October, the

two countries agreed to finalise a trade deal

within weeks that would maintain US tariffs of 20 per cent on its imports of Vietnamese goods, but exempt some unspecified products from the new duty imposed by US President Donald Trump in August.

Mr Son urged US businesses at a conference in Hanoi to help in bilateral negotiations so that the two parties could “soon sign a fair and balanced trade agreement”.

Assistant Secretary of State for East Asian and Pacific Affairs, Mr Michael DeSombre, told the conference in a recorded statement that the trade deal should rebalance commercial flows between the two countries, reducing the US deficit with Hanoi, which is the largest after China and Mexico.

For the first 10 months of the year, Vietnam has recorded a US$111 billion (S$144.62 billion) trade surplus with the US – pointing to another potential annual record – according to Vietnamese data, which is usually more conservative than US trade figures, currently unavailable because of an ongoing federal government shutdown.

A Vietnamese delegation led by Trade Minister Nguyen Hong Dien is in Washington this week for a new round of talks with US officials to work on finalising the trade agreement, the Vietnamese trade ministry said on its web portal.

A person briefed about the talks said negotiations would focus on identifying Vietnamese items that could be exempted from US tariffs, such as coffee, and on the scope of the preferential access to the Vietnamese market that Hanoi has pledged for US products, such as cars and farm goods.

The Vietnamese side aimed to finalise the deal ideally after the US Supreme Court decides on the legality of US tariffs imposed by Mr Trump, and possibly by December, the person said, declining to be named because the information was not public.

The court ruling is expected anytime before the end of 2025 and mid-2026.

Vietnamese negotiators are keen to mark the signing of a trade deal with a meeting between Mr Trump and Vietnam’s top leader To Lam, multiple officials have said.

Mr Son urged US businesses at Nov 12’s conference to support Vietnam’s efforts to set up the high-level meeting.

Past attempts have not been successful, according to multiple officials.

He also called on US businesses to encourage Washington to recognise Vietnam as a market economy and lift its restrictions on the export of high-tech products, such as advanced semiconductors.

Mr DeSombre said Vietnam could play a role in global supply chains for critical minerals.

Vietnam has large resources of rare earths and gallium but has been slow in exploiting them. REUTERS