United States Secretary of Commerce Howard Lutnick has ruled out eliminating tariffs on Vietnamese goods, even if Vietnam removes all trade barriers on American imports.

He cited Vietnam’s significant re-export of Chinese products to the US as a primary concern.

During a Senate Appropriations Subcommittee hearing on June 4, 2025 Lutnick described such a trade arrangement as unfavorable for the US.

In 2024, Vietnam exported US$136.6 billion worth of goods to the US, while American exports to Vietnam totaled only US$13.1 billion, according to the Office of the US Trade Representative.

Lutnick noted that Vietnam’s dependence on Chinese materials, which are re-exported to the US, remains a major issue.

He said, “They buy US$90 billion from China, then they mark it up and send it to us.”

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Vietnam’s dramatic trade evolution creates unique tariff challenges

U.S.-Vietnam trade relations have undergone a remarkable transformation in just three decades, evolving from post-war adversaries to major trading partners.

After establishing diplomatic relations in 1995, bilateral trade surged from $451 million that year to $149.6 billion in 2024, representing a 331-fold increase12.

This growth was catalyzed by the 2000 Bilateral Trade Agreement, which reduced U.S. tariffs on Vietnamese goods from an average of 40% to just 3%, creating a significant competitive advantage for Vietnamese exporters3.

The resulting trade imbalance—Vietnam now exports $136.6 billion to the U.S. while importing only $13.1 billion—has created a $123.5 billion deficit that Secretary Lutnick specifically cited as unsustainable in his Senate testimony2.

This extraordinary trade evolution explains why simply eliminating remaining Vietnamese tariffs (which are already low on many U.S. goods) wouldn’t meaningfully address the structural imbalance that has developed over decades.

2️⃣ The China factor complicates trade negotiations

Vietnam’s position as both China’s neighbor and a manufacturing alternative creates complex dynamics in U.S. trade policy.