The BGA Vietnam Team, led by Managing Director Nguyen Viet Ha, wrote a client update on the latest development of trade negotiations between Vietnam and the United States.

Context

  • Minister of Industry and Trade Nguyen Hong Dien met U.S. Trade Representative Jamieson Greer in Paris June 4 to review progress in the second round of bilateral negotiations and discuss the next round of technical negotiations. Dien informed Greer about the key points of Vietnam’s responses to the United States’ additional requests and expressed a willingness to seek consensus. Greer expressed appreciation Vietnam’s cooperative approach and highlighted the importance of a trade deal for both countries. The two leaders agreed to accelerate negotiations and address major outstanding issues during the third round of technical talks in Washington between June 9-13.
  • The U.S. trade representative recently sent a letter requesting negotiating partners by June 4 to submit their proposals in key areas, including tariff and quota offers for U.S. industrial and agricultural products, plans to address nontariff barriers and commitments on digital trade and economic security. Washington will evaluate responses within days and propose a potential agreement framework, including a reciprocal tariff rate. U.S. requests to Vietnam included measures that could reduce the country’s reliance on the import of materials and components from China.

Significance

  • Prime Minister Pham Minh Chinh met with the CEO of U.S.-based Excelerate Energy (EE) May 29 and discussed the potential for the company to establish a liquid natural gas (LNG) supply chain in Vietnam and share expertise to enhance the sector’s efficiency. Chinh noted the political and economic significance of the initiative, aiming to promote balanced and sustainable trade and cooperation between Vietnam and the United States. The EE CEO stated that the company has signed an agreement with PetroVietnam Gas to secure a long-term LNG supply from the United States for Vietnam and requested governmental support to facilitate investment, ensure supply stability and promote local joint ventures — ultimately aiming to develop Vietnam into a regional LNG hub in Southeast Asia.
  • During a testimony before a Senate committee on June 4, U.S. Commerce Secretary Howard Lutnick said the United States would not reciprocate even if Vietnam eliminated all tariffs on American goods. He argued that Vietnam imports goods from China, marks them up and sends them to the United States. He provided statistics indicating that Vietnam exports $125 billion worth of goods to the U.S. market while importing only $12.5 million in return, with about $90 billion of the Vietnamese exports originating from China. Lutnick mentioned that there is potential for negotiation if Vietnam reduces imports from China and addresses its trade deficit with the United States.

Implications

  • Vietnamese enterprises are set to sign over $2 billion in agricultural deals with U.S. suppliers, aiming to balance bilateral trade and support tariff negotiations. The agreements were signed during a business trip to the United States between June 2-7 led by Agriculture and Environment Minister Do Duc Duy, who was accompanied by nearly 50 participants from Vietnamese businesses and associations. In Iowa, the delegation signed five memorandums of understanding worth $800 million.
  • Foreign direct investment (FDI) saw significant growth, with total registered FDI hitting nearly $18.4 billion in the first five months, a 51.1 percent increase year-on-year. Additional registered FDI rose by almost 240 percent and indirect investment increased by 83 percent year-on-year. Disbursement of FDI capital reached about $8.9 billion, up 7.9 percent, highlighting Vietnam’s strong investment appeal.

We will continue to keep you updated on tariff-related developments in Vietnam If you have any comments or questions, please contact BGA Vietnam Managing Director Nguyen Viet Ha at vietha@bowergroupasia.com.

Best regards,

BGA Vietnam Team

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Managing Director

Ha is a highly respected Vietnamese lawyer, with special expertise in financial transactions, mergers and acquisitions, as well as general business, trade and investment-related issues. Before joining BGA as managing director for Vietnam, Ha managed the Vietnam operations of BrooksBowerAsia for three years. She built and led the Vietnam team and serviced clients in various sectors ranging from energy and ICT to healthcare, logistics and consumer production. Ha practiced law in Vietnam in the 1990s, providing legal advice and consulting services to Fortune 500 clients. She also participated in drafting a number of laws and regulations, including the Foreign Investment ... Read More