President Donald Trump’s announcement to increase tariffs and trade tensions between the U.S. and China negatively impacts Vietnamese businesses. He has instituted a 20% border tax on all goods they sell to the United States. A social media post announcing the new tariff. This is now a cut from Trump’s original suggestion of a 46% tariff. The increased rate, while lower, still creates serious hardship for most Vietnamese firms. These small businesses are working hard to export as much as ever.
Even as the ink dried on Wednesday’s historic U.S.-Vietnam tariff agreement, many questions remained. Now, businesses that have invested heavily in export capacity to supply the U.S. market are left feeling insecure. This failure to provide any meaningful details on the deal has left them scrambling. As one of the largest markets for Vietnamese exports, this tariff will have a crushing effect on that industry.
Lach Huyen International Port, in northern Vietnam, has become an essential gateway for such exports. The gateway fuels a huge share of trade flowing from Vietnam to the U.S. It has quickly evolved into a crucial touch-point for companies trying to understand the new tariff landscape. Atsushi Tomiyama, a local photographer, illustrated the importance of this port with a photograph illustrating the heightened activity.
Reactions to the newly announced tariff have been divided among Vietnamese companies. For many advocates, the 20% rate is a reasonable compromise. For some it is an irritant, for others a major headache and potential threat to their ability to compete and sell in the U.S. market. This lack of clarity as to the details of the agreement is extremely concerning. Now, businesses are wondering what this means for them and how to thrive in the new trade landscape.
Companies are concerned that the 20% surcharge will deter would-be purchasers. Even with that reduced tariff, they argue this increase would be detrimental to their thin profit margins. The effects of this tariff will likely ripple across many different sectors of the Vietnamese economy that rely on the good faith of American consumers.