[U.S. Reciprocal Tariffs] How Should Vietnamese Enterprises Respond?

On April 2, 2025, the U.S. government announced the implementation of a 46% reciprocal tariff on certain imports from Vietnam, set to take effect on April 9. This significant policy shift has prompted Vietnamese businesses to seek effective strategies to navigate the impending challenges.  

Preparing for the Worst-Case Scenario: Are Businesses Ready? 

In response to the U.S. tariff announcement, a seminar was jointly organized on April 4 by CFO Vietnam, VNIDA, FiinGroup, and EY, drawing over 500 representatives from Vietnamese enterprises. The event focused on disseminating information and discussing adaptive solutions to this development.  

Ms. Vo Thi Lien Huong, CEO of Secoin Corporation - a 100% Vietnamese-owned company specializing in exporting artisanal tiles - shared insights into their contingency plans should the 46% tariff be enforced. With the U.S. accounting for over 50% of Secoin's export revenue in 2024, the company anticipates substantial impacts and has proactively initiated a "rapid response" strategy centered on five key pillars:  

1. Supply Chain Stability – Strengthening Collaboration 

Secoin is enhancing coordination with logistics partners and distributors on both the East and West coasts of the U.S. to share cost risks and reinforce long-term relationships. 

2. Diversification of Export Markets 

The company is increasing investments in European, Australian, and Japanese markets, where it already has a presence but faces various barriers. In Europe, stringent requirements related to Environmental, Social, and Governance (ESG) standards, carbon taxes, and traceability necessitate compliance with high standards, involving considerable costs. 

3. Expansion in the Domestic Market 

Secoin is leveraging policies that restrict imports to promote a Direct-to-Customer (D2C) model, reaching domestic consumers through e-commerce platforms and new distribution channels. 

4. Financial Restructuring – Streamlining Operations 

Anticipating a potential decline in revenue from the U.S. market, the company is tightening cash flow management, optimizing material costs, streamlining its organizational structure, and adopting technology to enhance operational flexibility. 

5. Emphasizing Vietnamese Identity – Affirming "Made by Vietnam" 

Secoin's handcrafted artistic tiles are not easily replaceable by mass-produced alternatives. The company positions itself as a "Made by Vietnam" brand—produced by Vietnamese people with Vietnamese intellect—to create a distinct competitive edge over foreign direct investment (FDI) enterprises. 

The 46% Tariff: A Negotiation Lever Rather Than an Endgame 

According to Ms. Trang Pham, Deputy General Director of EY Consulting Vietnam, the 46% tariff is not intended to completely obstruct free trade but serves as a negotiation tool - a familiar tactic of President Trump.  

The phased tariff implementation - 10% prior to April 5 and 46% from April 9 - is designed to leave room for negotiations, similar to strategies previously employed with Canada and Mexico. The underlying objectives include:  

• Attracting foreign direct investment back to the U.S., particularly in strategic sectors such as automotive, steel, and energy.  
• Protecting domestic industries, aligning with the "America First" agenda.  
• Achieving economic milestones to bolster re-election prospects in 2026 and maintain control in Congress.  

Notably, the U.S. also faces internal pressures from this policy, as prolonged high tariffs could lead to increased consumer prices, fueling inflation and affecting voter sentiment - a critical factor in upcoming political campaigns.  

In this context, Vietnam has proactively engaged in early negotiations, asserting that its exports do not directly compete with U.S. products and expressing willingness to reduce import tariffs to 0%. This strategic goodwill opens avenues for tariff adjustments and promotes bilateral trade, despite the absence of a formal Free Trade Agreement (FTA) between the two nations.  

Impact Variations Across Industries 

From a data analytics perspective, Mr. Nguyen Quang Thuan, Chairman of FiinGroup and FiinRatings, emphasized that the extent of impact on specific industries depends on several factors:  

• Applicability of the New Reciprocal Tariff Rates: Businesses should monitor ongoing negotiations, as the final tariff schedule is still under discussion, and opportunities for adjustments remain. While a new tariff schedule has not been finalized, a list of exempted product categories is available. 
• Export Volume to the U.S. and Dependence on Chinese Imports: The degree of reliance on the U.S. market and the proportion of imported raw materials from China will influence the impact level. 
• Industry and Enterprise Resilience: Industries with higher domestic value addition, greater profit margins, and robust financial positions are better equipped to withstand these challenges. 

Market Diversification: A Necessity Despite Challenges 

While there are positive signals, experts agree that, given the possibility of President Trump serving another term, the risk of recurring high-tariff policies persists. Additionally, Vietnam has yet to be recognized by the U.S. as a market economy, posing a significant hurdle in trade relations and affecting negotiation capabilities and tariff preferences.  

This underscores the imperative for Vietnam to intensify efforts to diversify export markets. Currently, the U.S. accounts for approximately 30% of Vietnam's export turnover. The ongoing shift in supply chains presents a substantial opportunity. Encouragingly, markets such as Australia and Europe are expressing interest in enhancing cooperation with Vietnam to mitigate reliance on the U.S. and China, making market diversification a feasible strategy.  

However, according to Mr. Nguyen Quang Thuan and Mr. Nguyen Hoang Linh, Head of Research at VCBF, this transition will not be easy, particularly for small and medium-sized enterprises (SMEs), due to the following key challenges: 

• Stringent ESG Requirements in European Markets: Europe imposes high standards related to Environmental, Social, and Governance (ESG), particularly carbon reporting and the Carbon Border Adjustment Mechanism (CBAM), which will take effect in 2026. Many SMEs currently have no clear starting point due to the lack of official information and limited resources to hire consultants or establish dedicated compliance teams. 
• Barriers in Standards, Financing, and Procedures: Regulatory and financial requirements make it impossible to shift markets overnight. A clear roadmap and serious preparation are essential to avoid missing opportunities. 

What Should Businesses Do Now? 

In a recent quick survey by FiinGroup of nearly 100 experts and business leaders: 

62% believe Vietnam will successfully negotiate a reduction in the reciprocal tariff to the 15–20% range 

21% believe the risk of Vietnam being subject to the full 46% tariff remains high 

These results indicate that while there are positive signs, nothing is guaranteed, and businesses must proactively prepare for various scenarios regardless of the outcome on April 9. 

In the short term, businesses should consider: 

• Developing financial scenarios to manage cost volatility and market changes 
• Engaging logistics and distribution partners early to share risks 
• Strengthening domestic market presence to improve resilience 

In the medium to long term: 

• Upgrade governance, improve financial transparency, and comply with ESG standards to diversify export markets and qualify for lower-cost international financing 
• Collaborate with the Government to promote institutional reforms and improve Vietnam’s sovereign credit rating, which is foundational to helping businesses access cheaper capital, raise funds efficiently, and grow sustainably 

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Key Reference Documents for Businesses: 

• Annex I: List of reciprocal tariffs applicable to each country → Annex-I.pdf 

• Annex II: List of products exempt from reciprocal tariffs → Annex-II.pdf 

• Annex III: Although not explicitly mentioned in the main content of the Executive Order (EO), this annex is referenced in Annex II. It is not published on the White House website alongside the EO but is instead available through a separate link. 
  This document is crucial as it outlines the specific Chapter 99 codes in the Harmonized Tariff Schedule (HTS) used to implement the tariffs and exemptions specified in the EO. Annex-III.pdf

The structure of Annex III includes five parts: 

• Part 1: HTS Chapter 99 codes effective from April 5 to April 9 

• Part 2: HTS Chapter 99 codes applicable after April 9, when country-specific tariffs take effect 

• Parts 3 & 4: Implementation of a 12% tariff on Canada and Mexico if previous executive orders on immigration and drug trafficking are rescinded