President Donald Trump’s return to the White House signals a new era of protectionist trade policies, with broader and tougher tariffs than in his first term, impacting global trade more aggressively.
In his second term, President Trump declared an economic emergency, expanding tariff powers. He swiftly imposed a 10 per cent tariff on Chinese imports, raised steel and aluminium tariffs to 25 per cent, with a possible 10 per cent baseline tariff on all imports and up to 60 per cent on Chinese goods. These measures effect not only China but also Canada, Mexico, the EU, Japan, and Southeast Asia.
Vietnam, a key beneficiary of US-China supply chain shifts, is facing mounting pressure. With a record $US123 billion trade surplus, it risks ‘reciprocal’ tariffs from Washington. Dr Chu Thanh Tuan, Associate Program Manager, Undergraduate Business Programs at RMIT Vietnam, analyses the impact of Trump’s tariff policies on global trade and Vietnam’s economy.
During Trump’s first term, his administration-imposed tariffs on $US350 billion of Chinese goods, along with 25 per cent on steel and 10 per cent on aluminium from other countries. In response, China and the EU targeted US agricultural and energy exports. Under President Biden (2021–2024), tariffs on China remained, but tensions with allies eased as the US paused disputes with the EU and restricted China’s access to advanced technology.
Vietnam’s growing trade surplus with the US is drawing increasing scrutiny, putting it at risk of protectionist measures, according to Dr Tuan. (Photo: RMIT)
Trump’s return has reignited trade tensions, but most countries are still evaluating their responses.
"During his first term, we saw swift countermeasures from Canada, Mexico, and the EU, while China adjusted its policies," Dr Tuan said.
"This time, apart from Canada’s immediate tariffs and China’s economic shifts, most nations have yet to act."
Canada responded quickly, imposing a 25 per cent retaliatory tariff on $US155 billion of US goods, targeting politically sensitive sectors like agriculture, steel, and consumer products. China also moved fast, retaliating against US farm products while increasing subsidies and adjusting its currency.
Other major economies, including Mexico, the EU, and Japan, are still formulating their strategies.
"In Trump’s first term, Mexico targeted US agricultural exports, and the EU imposed tariffs on symbolic American products like Harley-Davidson motorcycles and bourbon. This time, we’re not seeing the same level of immediate action," Dr Tuan said.
Japan previously prioritised diplomacy and continues this approach, while Southeast Asian nations, including Vietnam, are monitoring supply chain shifts before making policy decisions.
While many countries weigh their options, Vietnam faces unique challenges. As a key player in shifting supply chains, it is now under scrutiny from Washington.
By 2025, Vietnam had emerged as a beneficiary of shifting global supply chains, attracting investments from Apple, Intel, and Nike. However, this economic success came with rising scrutiny. Vietnam’s growing trade surplus with the US has made it vulnerable to protectionist policies said Dr Tuan.
As U.S. tariffs disrupt global trade, Vietnam faces mounting pressure to navigate its economic ties while avoiding becoming Washington’s next target. (Photo: Sundry Photography - stock.adobe.com)
According to Dr Tuan, historically Trump’s tariffs have targeted countries with large US trade surpluses, including Canada, Mexico, and Japan. Vietnam faces similar risks, with Trump’s advisors accusing it of ‘taking advantage’ of US trade. While no tariffs have been imposed, the likelihood is rising under Washington’s reciprocal tariff strategy.
Beyond tariffs, concerns persist over Vietnam’s role in global supply chains.
Some US officials worry that Vietnamese exports contain Chinese-origin components, rebranded to bypass tariffs.
Though only an estimated 1.8 per cent of Vietnam’s exports fall into this category, the issue fuels trade surveillance risks and potential US investigations.
Trump’s policies also indirectly impact Vietnam by disrupting regional supply chains. As Chinese businesses reroute exports through Vietnam to avoid tariffs, Hanoi must carefully balance trade with China—its largest partner—while avoiding punitive actions from the US. This requires a strategic approach to ensure Vietnam remains a trusted trade partner.
To mitigate risks, Vietnam must be proactive. Strengthening bilateral dialogue with the US is key to highlighting mutual trade benefits. According to Dr Tuan, most of Vietnam’s exports come from foreign direct investment (FDI), including US businesses. “For example, Apple assembles AirPods in Vietnam, but profits still flow to the US. If tariffs are imposed, American corporations will also be affected,” he said.
To safeguard its trade position, Vietnam needs to strengthen dialogue with the US, increasing imports, and ensuring compliance with origin regulations. (Photo: Hien Phung - stock.adobe.com)
Increasing US imports is another way to ease trade tensions. The US supplies only 5 percent of Vietnam’s agricultural imports, despite Vietnam’s heavy reliance on soybean, cotton, and pork.
“Expanding imports in these areas would balance trade and support American industries, particularly in states crucial to Trump’s political base,” Dr Tuan said.
“Vietnam’s rising demand for liquefied natural gas (LNG) presents another opportunity to boost US imports, benefiting both economies.”
Strict compliance with origin regulations is crucial. Vietnam has tightened its certification rules and enhanced customs cooperation with the US. Dr Tuan emphasised that demonstrating genuine local value in exports will make it harder for Washington to justify tariffs over concerns about Chinese-origin goods.
Diversifying export markets is another long-term strategy. Over the past few years, Vietnam has expanded trade deals like EVFTA (with the EU) and CPTPP (with Japan and Canada) to reduce reliance on the US.
“Increasing exports to these markets will lessen Vietnam’s vulnerability to shifting American trade policies,” Dr Tuan said.
“Vietnam must act now to protect its economic interests,” Dr Tuan said.
By implementing the right strategies, it can avoid tariffs, strengthen its global trade position, and clearly differentiate itself from China as a fair and reliable US trade partner.
Story: Quan Dinh H.
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