Vietnam holds emergency talks with US as 46% tariff threatens to crush exports

Vietnam’s trade officials rushed into emergency negotiations with the United States on Friday, trying to delay or cancel a planned 46% tariff that could gut its export economy.

The face-to-face meeting between Vietnamese Trade Minister Nguyen Hong Dien and US Trade Representative Jamieson Greer happened in Jeju, South Korea, right after the 31st APEC Ministerial Meeting on Trade.

According to Reuters, the sit-down marked the first formal ministerial-level talk between the two countries on the issue. The US has postponed the massive tariff until July, but Vietnam isn’t taking any chances. 

The levy would hit at a time when Hanoi depends heavily on selling goods to the US, which is still its biggest export market. On top of that, foreign factories operating in Vietnam to serve American retailers could get crushed under the new tax burden. 

The potential hit is so big because last year alone, Vietnam had a $123.5 billion trade surplus with the US—the fourth-largest of any country.

Nguyen pushes for compromise as Greer supports proposal

Nguyen and Greer’s Friday meeting wasn’t their first communication. The two had already spoken last month on a call that formally opened the negotiation track. During that earlier call, Greer signaled support for Vietnam’s approach to the growing trade imbalance.

In the Jeju talks, both parties seemed eager to keep things moving forward.

“USTR Greer agreed with Vietnam’s current approach and proposal,” the Vietnamese trade ministry said in a public statement on Saturday. “The United States hopes that with the mutual efforts, the technical-level negotiations in the coming days will yield positive results.”

To cool tensions and shrink the trade surplus, Vietnam has already made some concessions. Hanoi has cut tariffs on US-bound goods and has started cracking down harder on Chinese exports using Vietnam as a backdoor to dodge American taxes. 

Those transshipments have long irritated US trade officials, who accuse Chinese companies of rerouting their products through Vietnamese ports to sneak around Trump’s import levies.

The danger now is that even these efforts might not be enough. If Washington imposes the 46% tariff, it will impact hundreds of factories and assembly plants that power Vietnam’s export engine. Electronics, furniture, clothing—all of it could get hit.

And any disruption to American-bound trade also risks spooking investors who have poured capital into Vietnam as a safer, cheaper alternative to China.

China and US trade reps meet while Beijing stays quiet on Trump-Xi talks

While Vietnam was scrambling, China’s trade envoy Li Chenggang was also making moves. On May 12, Li met with Greer on the sidelines of a separate event in Switzerland, marking the first high-level US-China meeting in months.

When asked by CNBC whether the talks were helpful, Li simply said, “Definitely,” offering no details. He also claimed he didn’t know if President Donald Trump would speak directly with Chinese President Xi Jinping, despite Trump suggesting earlier in the week that a call could happen soon.

Beijing didn’t add anything either. The Chinese Ministry of Commerce’s daily press briefing started an hour late that day, and its spokesperson He Yongqian gave no updates. Even with the radio silence, analysts watching the situation said that a direct conversation between Trump and Xi would likely be needed before anything major happens.

Still, the first Geneva negotiations had their impact. China’s side saw it as proof that standing firm against US pressure could still open the door to future talks. The two countries agreed to temporarily lower tariffs to buy time and launched a new “communication mechanism” to keep channels open on economic and trade issues.

That pause—small as it is—was enough to slightly lift the mood in Beijing. Economists have already started tweaking their growth forecasts for the year, seeing the reprieve as a small break in what’s otherwise been a trade war grind.

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