The Vietnam-US Trade Agreement: New Opportunities and Challenges – DLS GLOBAL Always by Your Side

The recently announced historic bilateral trade agreement between Vietnam and the United States marks a significant milestone in the economic relationship between the two nations. Under this agreement, the US will impose a 20% tariff on Vietnamese goods imported into the US and a 40% tariff on transshipped goods, while Vietnam commits to fully open its market to American goods with 0% tariffs. So, how will this agreement impact Vietnam’s economy, and what are the opportunities and challenges for businesses?

Breakthrough Opportunities for Vietnam’s Economy

This agreement offers several positive prospects for Vietnam:

• Stabilizing Trade Relations: Reaching a clear tariff agreement framework helps stabilize the business environment and reduces uncertainty for import-export businesses. Although the 20% tariff is higher than before, it is still better than the 46% reciprocal tariff previously proposed, creating conditions for key industries such as textiles, footwear, and electronics to continue to maintain and develop in the US market.
• Promoting Foreign Direct Investment (FDI) and Supply Chains: Vietnam becoming a tariff-advantaged destination compared to some competitors could attract more FDI, especially from businesses looking to diversify their supply chains away from higher tariff-risk regions. This encourages an increase in the localization rate of products, creating added value right here in Vietnam.
• Access to High-Quality American Goods: Opening the market to US goods with 0% tariffs will help Vietnamese consumers access high-quality products at more competitive prices, from automobiles and machinery to agricultural products. At the same time, this is also an opportunity for Vietnam to become a “gateway” for American goods into the ASEAN region and Asia.
• Strengthening Economic Position: The ability to successfully negotiate and implement flexible policies demonstrates Vietnam’s capability on the international stage, solidifying its position as a dynamic and attractive economy.

Challenges to Overcome

Besides the opportunities, the agreement also poses certain challenges:

• Competitive Pressure on Domestic Goods: Opening the market to US goods may create significant competitive pressure on domestic industries, requiring Vietnamese businesses to improve quality, reduce costs, and enhance competitiveness.
• Impact of the 20% Tariff: The 20% tariff still represents a substantial cost burden for Vietnamese exporters. Businesses need to implement strategies to adjust prices, optimize production processes, and seek cost-reduction solutions to maintain profitability.
• Controlling Transshipped Goods (40%): The 40% tariff on transshipped goods places high demands on clearly defining rules of origin. This requires transparency in the supply chain and the ability to clearly demonstrate “Made in Vietnam” origin to avoid the risk of high tariffs.
• Supply Chain Upgrading Requirements: To leverage opportunities and mitigate challenges, businesses need to invest in technology, upgrade logistics infrastructure, and develop high-quality human resources to meet the stringent standards of the US market.

DLS GLOBAL Always By Your Side

In the context of significant changes in trade policy, DLS GLOBAL affirms its readiness to accompany Vietnamese businesses. With extensive experience and expertise in supply chain and logistics, we are committed to:

• In-Depth Consulting: Providing updated information and strategic advice on new tariff regulations, especially regarding transshipped goods, helping clients understand and comply with requirements.
• Optimizing Shipping Costs: Offering effective logistics solutions, optimizing routes and transportation methods to minimize costs, helping businesses maintain a competitive edge even when facing new tariffs.
• Ensuring Seamless Supply Chains: With a wide network and flexible supply chain management capabilities, DLS GLOBAL ensures your goods are transported smoothly, safely, and on time, from the factory to the consumer market in the US.
• Customs Clearance Support: Handling complex customs procedures quickly and accurately, especially for new origin and transshipment regulations, helping businesses save time and avoid potential risks.

The Vietnam-US trade agreement ushers in a new era with both opportunities and challenges. DLS GLOBAL is proud to be a reliable partner, providing comprehensive supply chain and logistics solutions to help Vietnamese businesses stand firm on the path of integration and sustainable development.