Hanoi (VNA) – The National Statistics Office of Vietnam (NSO) on July 5 unveiled an analysis of potential economic impacts of reciprocal tariffs from the US, offering three distinct scenarios that could reshape the nation's growth trajectory and provide crucial insights for macroeconomic policy and business planning.
The US is currently Vietnam's largest export market, playing a crucial role in boosting economic growth and creating millions of jobs. Last year, Vietnam’s exports to the country accounted for 29.5% of total value, reaching 119.5 billion USD.
Key export sectors include computers, electronics, machinery, textiles, and wood products. In the meantime, Vietnam was the 8th largest trading partner of the US, representing around 4% of total US exports. Vietnam’s trade surplus with the country was 104.4 billion USD, with the proportion of exports to the US increasing steadily over recent years.
According to the US Trade Representative's 2024 Foreign Trade Barriers Report, the current average Most Favored Nation (MFN) tariff rate applied to Vietnamese goods is 9.4%. However, this rate varies significantly across sectors, with agricultural products facing higher tariffs at 17.1% while non-agricultural goods encounter an average rate of 8.1%.
Vietnamese customs data reveals that 15 product categories achieved export values exceeding 1 billion USD in 2024, demonstrating the diversity and depth of Vietnam's export structure to the US market.
Three dominant sectors account for more than half of total export value, including computers, electronics, and components with 23.2 billion USD; machinery, equipment, tools, and spare parts with 22 billion USD; and textiles and garments with 16.2 billion USD.
Under the first scenario, where the US implements an average 10% tariff on all Vietnamese exports, the actual increase would be minimal, translating to 0.5% increase in retail prices for Vietnamese goods in the US market, according to NSO Deputy Director Le Trung Hieu.
He said using standard economic elasticity coefficients, this scenario will result in different outcomes depending on consumer sensitivity to price changes. With an elasticity coefficient of 1.0, demand will decrease by 0.5%, leading to a corresponding 0.5% drop in export value. However, with a higher elasticity coefficient of 1.2, reflecting more price-sensitive consumers, demand will fall by 0.6%, potentially reducing GDP by 0.05 percentage points.
The second scenario envisions a 15% average tariff rate, Hieu said, adding this represents a 5.6 percentage point increase from current levels (from 9.4% to 15%).
If the US levies a tariff level of 20%, the export value could decrease by 9-10%, and the effect on GDP could be a reduction of about 0.8 percentage points. This level of tariff increase will also cause retail prices in the US to rise by approximately 9.7%.
Hieu noted that these projections were made under specific assumptions, including elasticity coefficients ranging from 1 to 1.2%, no additional market expansion or export market diversification, and no acceleration of existing Free Trade Agreement (FTA) implementations./.
