HANOI (AFP) – Vietnam has asked for a last-minute delay to colossal tariffs imposed by Washington as government figures showed that its economy grew at a slightly slower pace in the first quarter.
The Southeast Asian manufacturing powerhouse counted the United States (US) as its biggest export market in the first three months of the year but its key customer has now hit it with a thumping 46 per cent tariff.
The move is part of a furious new global trade blitz announced by US President Donald Trump that has sent markets around the world into a tailspin.
However, top leader To Lam has asked Trump for a delay of at least 45 days to the new 46 per cent tariff, according to a copy of a formal letter seen by AFP.
In the letter, Lam said he had appointed Deputy Prime Minister Ho Duc Phoc to serve as the primary contact with the US side on the issue, “with the aim of reaching an agreement as soon as possible”.
He also said he hoped to meet Trump in Washington at the end of May to finalise the matter.
Trump said he had had “a very productive” call with Lam, who he said wanted to make a deal on tariffs.
Gross domestic product (GDP) in Vietnam during the first quarter grew 6.93 per cent year-on-year, down slightly from the 7.55 expansion in the final quarter of last year, Vietnam’s General Statistics Office said.
Despite the challenge presented by US levies, Vietnamese Prime Minister Pham Minh Chinh said a target of “at least eight per cent” growth this year remains unchanged, the government’s official news portal said.
To achieve its goal, Vietnam’s Ministry of Finance has determined that the economy will need to grow between 8.2 and 8.4 per cent in the remaining quarters, the government said. The US tariffs threaten to “significantly damage” Vietnam’s current growth model, which relies heavily on exports to the US, said senior country risk analyst at research firm BMI Sayaka Shiba.
She said that, in the worst-case scenario, Vietnam could suffer a three-per-cent hit to GDP this year.
SIGNIFICANT DAMAGE
Trump has claimed the country charges the US a 90-per-cent tariff, a figure based on Vietnam’s trade surplus with the US, worth USD123.5 billion last year.
Experts believe the new tariffs will hit hardest in sectors such as seafood, garments, footwear, wood, electronics and smartphones.
Major US corporations with manufacturing operations in Vietnam, including Nike and Adidas, are likely to see orders decrease and reductions in revenue, potentially leading to factory downsizing and job losses, lecturer in economics at Fulbright University Vietnam Pham Van Dai told AFP.
Business groups have also called on the Trump administration to delay the imposition of reciprocal tariffs.
The American Chamber of Commerce in Hanoi and the Vietnam Chamber of Commerce and Industry said that they sent a joint letter to the US commerce secretary expressing “deep concern” over the policy and urging a delay.
Vietnam’s exports rose 10.6 per cent year-on-year in the first quarter, official data showed, increasing significantly from 7.9 per cent growth in the final quarter of 2024.
Industrial production was up 7.8 per cent year-on-year, slowing from an 11.5 per cent expansion in the previous quarter.
Experts believe investors are still holding a “wait and see” mentality amid the uncertainty caused by Trump’s tariffs.
“Now is the worst time for investors to make long-term decisions,” said Dai, adding that they are waiting for “clearer policies from the US and (other) countries’ responses”.
