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Recently, Trump blinked first in the trade war that he started with China. However, Beijing keeps rejecting President Trump’s claims of ongoing tariff talks, and demand “respect” before entering any negotiation.
This standoff is quietly shifting leverage toward countries like Vietnam.
Firstly, U.S. allies such as the EU cannot fully replace China’s role in American supply chains. There is limited overlap between what the U.S. imports from Europe and what it traditionally sources from China, making Vietnam a potential alternative to bridge part of the gap.
Secondly, Trump needs to close a deal to validate his aggressive tariff strategy. With Vietnam’s proactive approach since the beginning of his new term—offering to expand purchases of U.S. goods, opening its market further to American businesses, and signaling a willingness to negotiate—optimism of a favorable deal for Vietnam is within reach.
Momentum is already building: USTR officials recently described their trade meeting with Vietnam as “productive,” reflecting a positive shift in dialogue.
As for tariffs, looking at Mexico—a country with a larger U.S. trade surplus and similar FDI dynamics—we think Vietnam could realistically negotiate for a tariff rate in the 20–30% range.
And as former U.S. Treasury Secretary Janet Yellen emphasized, Vietnam plays a vital role in “friendshoring” supply chains. And in today’s global realignment, nearshoring and friendshoring should be treated equally.
