Vietnam's trade surplus with the U.S. soared to a record high last year, U.S. data released on Wednesday showed, potentially complicating Hanoi's efforts to stave off trade tariffs from the new Trump administration.
The data shows the Southeast Asian nation behind only China, the European Union and Mexico in the scale of its trade imbalance with Washington, but analysts say Hanoi's pledges to import more from the U.S. as well as other offsetting measures could spare it from the punitive measures.
Sweeping U.S. tariffs on all Chinese imports came into effect on Tuesday, prompting an immediate response from Beijing, while Trump has also threatened the EU with new levies. Mexico and Canada had new 25% duties suspended for 30 days on Tuesday after they promised to beef up border protection.
Vietnam's trade surplus with the U.S. rose annually by nearly 20% in 2024 to a record level exceeding $123 billion, according to the latest data from the U.S. government.
In the same period the gap with China grew by less than 6% to $295.4 billion, far below its peak in 2018; the EU's surplus went up by nearly 13% to a high of $235.5 billion; and the deficit with Mexico increased by 12.5% to almost $172 billion, also an all-time record.
Vietnam and Mexico were both major beneficiaries of the last U.S.-China trade war, as manufacturers based in China moved production overseas to avoid tariffs imposed on Beijing from 2018 during Trump's first term in office.
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Despite the ballooning trade gap, Vietnam is in a different position from other top exporters, as it does not pose an apparent security threat to the U.S., said Sayaka Shiba, a senior analyst at research firm BMI.
The Trump administration prepared tariffs on Mexico and China under the International Emergency Economic Powers Act (IEEPA), citing risks from immigration and drugs, said Shiba, noting "it would be more difficult to argue convincingly that Vietnam is a threat to national security."
Vietnam may still face trade-related tariffs, Shiba said, adding that such measures would need to be upheld with investigations, which would give Vietnam time to work out ways to avoid them.
Sectoral tariffs may carry a higher risk for Vietnam, especially on the import of semiconductors, Shiba said, noting Vietnam is a top exporter of semiconductors to the U.S.
Vietnamese officials have repeatedly said they would seek to find compromises with Washington on trade. Earlier on Wednesday Prime Minister Pham Minh Chinh instructed officials to prepare for the impact of a possible global trade war without mentioning the prospect of tariffs on Vietnam, according to a post on the government portal.
Among possible sweeteners are boosting Vietnam's imports from the U.S. of liquefied natural gas (LNG) and a reduction of import duties on U.S. agricultural products, such as soybeans, cotton and meat, Shiba said, noting exports were hard to cut as they were mostly from large multinational companies operating from Vietnam, such as Samsung Electronics (005930.KS) and Intel (INTC.O).
"Promising to buy things is the best strategy for Vietnam, even if tangible results are not always possible in the short term," Elms said.
