Ahead of Reciprocal Tariffs on April 2
Vietnam Announces Conciliatory Measures to Counter Tariff Threats
Pham Minh Chinh, Prime Minister of Vietnam, is giving a speech at the groundbreaking ceremony for the VSIP Thai Binh Industrial Park project held at the government office in Hanoi, Vietnam, on the 26th of last month. / Photo by EPA News Agency and Yonhap News
Vietnam announced conciliatory measures toward the U.S., including tariff reductions on American-made automobiles ahead of the U.S. reciprocal tariff announcement on the 2nd of next month (local time), and approval of Elon Musk's satellite internet service Starlink, a key player in the Government Efficiency Department (DOGE).
According to Reuters in the U.S. on the 26th, the Vietnamese Ministry of Finance stated that tariffs on U.S.-made liquefied natural gas (LNG) will be lowered from the current 5% to 2%. Tariffs on automobiles will be reduced from 45-64% to 32%, and ethanol tariffs will be cut from 10% to 5%.
The Ministry of Finance added that tariffs on U.S.-made ethane will be abolished, and tariffs on chicken drumsticks, almonds, apples, cherries, and wood products will also be reduced. The Ministry explained that this decision is "to improve the trade balance with the counterpart country" and that legislation for tariff reductions will be prepared within this month.
Separately, the Vietnamese government also approved the entry of Starlink, the space company led by Musk's SpaceX. The government allowed Starlink to conduct a pilot operation targeting up to 600,000 subscribers until January 2031.
SpaceX had attempted to enter the Vietnamese market with Starlink, but investment was postponed after Vietnam decided in late 2023 not to lift foreign ownership restrictions on satellite internet providers. However, Vietnam's National Assembly approved a temporary regulation last month allowing satellite internet companies 100% owned by foreigners to provide services in Vietnam, suddenly reversing Vietnam's stance on Starlink.
Vietnamese Prime Minister Pham Minh Chinh met with U.S. companies operating in Vietnam earlier this month and pledged to swiftly approve Starlink's entry into Vietnam. Vietnam has been pursuing tariff reductions and import expansion of U.S. products as a countermeasure to reduce its trade surplus with the U.S.
The approval of Starlink is also interpreted as a conciliatory measure in preparation for tariff threats from U.S. President Donald Trump. Jamieson Greer, U.S. Trade Representative (USTR), recently demanded stronger solutions from Nguyen Hong Dien, Vietnam's Minister of Industry and Trade, during his visit to the U.S. to improve trade imbalances and further open the market between the two countries.
Vietnam's merchandise trade surplus with the U.S. last year reached a record high of $123.5 billion (approximately 181 trillion won). The surplus was the fourth largest after China, the European Union (EU), and Mexico.
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