Vietnam and the United States recently engaged in their inaugural ministerial-level tariff negotiations, held in Jeju, South Korea. This meeting comes as the US is poised to impose a staggering 46 per cent tariff on Vietnamese imports starting July 2024, which could have significant implications for Vietnam’s economic growth.
Strengthening Economic Ties
During the talks, described as a mutual effort towards a stable trade relationship, Vietnamese Trade Minister Nguyen Hong Dien and US Trade Representative Jamieson Greer expressed a shared commitment to resolving the trade imbalances. The discussions were initiated after a phone call last month which indicates ongoing cooperation between the two countries.
Concerns Over Trade Deficit
According to Vietnamese state media, the US has raised concerns about the trade deficit with Vietnam, labelling it “unsustainable”. Senior US Treasury officials have urged Vietnam to address issues like illegal transhipment, which is vital for a healthier trade environment.
Vietnam’s Trade Surplus Highlights
- Last year’s trade surplus with the US was reported at US$123.5 billion (S$160 billion).
- Vietnam has implemented measures to reduce its surplus, including lowering tariffs on goods headed to the US.
- Efforts to curb the shipment of Chinese goods through Vietnam to the US are also underway.
Future Prospects
Vietnam Prime Minister Pham Minh Chinh remarked on the significance of these negotiations, indicating that they are among the first of their kind with the US. As Vietnam actively seeks a balanced trade relationship, the outcomes of these discussions could pave the way for a more stable economic environment.
As the 1 July deadline approaches, all eyes will be on the results of these negotiations, encouraging optimistic projections for both nations’ economic futures.