Vietnam's Trade Talks With US Could Be A Pathfinder For South-east Asia

A key beneficiary of China-plus-one, Vietnam's strategy illustrates the challenges of navigating between the US and China in this second trade war.

- Shay Wester and Meghan Murphy

It started poorly. Despite months of proactive outreach, Vietnam was blindsided by the sweeping scope of the tariff announcement on April 2. A staggering 46 per cent reciprocal tariff made it the fifth-highest-tariffed country by the US.

Rather than retaliate, however, Vietnam immediately sought diplomatic engagement. The Communist Party of Vietnam's general secretary To Lam was among the first foreign leaders to speak directly with US President Donald Trump, offering to eliminate all tariffs as part of a bilateral deal.

The signal sent was one of a friendly partner who bends with a strong wind like a bamboo. Alongside negotiations with US Trade Representative Jamieson Greer, Vietnam has since announced new purchases of US products and issued directives to curb illegal transshipment and tighten export controls.

Hidden beneath are the country's high stakes. While Hanoi negotiates a trade deal, it is focused on a nationwide plan to reach high-income economy status by 2045, which involves a massive government restructuring and cost-cutting drive.

Mr Lam's ambitious transformation for his country - which Vietnam says requires gross domestic product growth of 8 per cent or more in 2025 - will be at risk if he cannot maintain robust economic relations with both the US and China.

The immediate impact of the tariffs has not yet been felt. Ironically, Vietnam's trade surplus with the US, already one of the highest, expanded by 25 per cent in the first four months of 2025, driven largely by rising exports of smartphones, laptops and other electronics. In March alone, the surplus exceeded US$13.5 billion (S$17.5 billion), a record high, as firms ramped up shipments ahead of potential new tariffs.