Vietnam’s soaring US trade surplus stokes new fears of Trump tariffs

By Francesco Guarascio

HANOI (Reuters) – Vietnam is vulnerable to becoming the new Trump administration’s next target for tariffs as data shows its trade surplus with the United States ballooning, industry executives and analysts said.

The Communist-run country, home to large industrial operations of U.S. multinationals such as Apple (NASDAQ:), Google (NASDAQ:), Nike (NYSE:) and Intel (NASDAQ:), has the fourth highest commercial surplus with the United States, topped only by China, the European Union and Mexico. 

U.S. trade data released on Thursday showed the country’s deficit with Vietnam reached $102 billion in the first ten months of this year, nearly a 20% increase over the same period in 2023. 

“For Trump the main metric is the trade deficit, and the Vietnam number is bad,” said Deborah Elms, head of trade policy at the Asia-based Hinrich Foundation.

“Vietnam is an ideal candidate for early action because it cannot easily retaliate,” she said.

President-elect Donald Trump, who takes office in January, threatened tariffs of up to 20% on all U.S. imports during his election campaign.

His son Eric, a top adviser, has cited Vietnam among countries that “ripped off” the U.S., according to a video shown last week at a business conference in Hanoi organised by American chambers of commerce.

At the event several businessmen and trade association representatives expressed concern about possible tariffs on Vietnam.

“The new tariffs are one of the biggest concerns for the Korean industry in Vietnam,” Hong Sun, head of South Korea’s chamber of commerce in Vietnam, told the conference. South Korea’s Samsung Electronics (KS:) is a major exporter of smartphones and electronic devices to the U.S. from Vietnam

Vietnam’s foreign affairs ministry did not reply to a request for comment on potential tariffs, but Vietnamese officials have repeatedly urged Washington to maintain seamless trade.

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In another sign Vietnam could face tariffs, Trump picked Peter Navarro to be his senior counselor for trade and manufacturing.

Navarro has said tariffs on Vietnam would be highly effective in cutting the U.S. trade deficit, writing in the Project 2025 proposals seen by many policymakers in Washington as a blueprint for the new Trump administration.

“Navarro has been a well-known expert under the Trump administration for increasing the size of the American manufacturing sector, imposing high tariffs, and repatriating global supply chains,” said Nguyen Hung, a specialist in supply chains at RMIT University Vietnam.

Vietnam benefited from trade barriers Trump imposed on Beijing in his first term, which spurred manufacturers to shift production out of China.

With nearly one-third of Vietnam’s exports now going to the U.S., the country would need to improve the traceability of goods and components to dispel concerns of being used merely as an assembling site for products made in China, Hung said.

The country could partly offset its large trade surplus by boosting its imports from the U.S., including possibly liquefied (LNG), drugs and airplanes, officials have said. 

However, it is unclear whether Vietnamese authorities support these offsetting measures and how significant they could be.

“I don’t think Vietnam is in a position to buy quickly and enough” to materially reduce its surplus, said Elms of the Hinrich Foundation.