Since early 2025, the new tariff system introduced by President Donald J. Trump’s administration has stirred global debate. From Europe to Asia, Africa to Latin America and Oceania, opinions are divided. Some see it as a move to block China from overtaking the US as the global economic leader. Others view it as a tactic for bilateral bargaining with nearly 200 countries, pushing them to buy more American goods and reduce trade surpluses. Still others believe it’s simply another step in delivering on the MAGA (Make America Great Again) slogan.

In essence, the new policy marks the end of a “free market” phase and the beginning of a uniquely American market economy for the 21st century  -  a departure from the post-1945 template.

20% – simple to remember, complex to interpret

The US tariff list varies widely: 4% for four countries (including the UK and Australia); 15% for 39 nations (Afghanistan, Bolivia, Cameroon…); 19% for Thailand, the Philippines, Malaysia; 30% or higher for others (Algeria, Iraq, South Africa, Sweden…); Canada from 25% to 35%; Myanmar 40%; China 55%.

Vietnam’s 20% rate is easy to recall, but raises questions: Has the Vietnam–US Strategic Partnership cooled? Is Vietnam perceived as following China’s development model? Or is it simply maintaining a high bilateral trade surplus?

In early August 2025, the US reduced Vietnam’s tariff to 20%, a level seen as matching the current “common denominator” for the medium and long term.

Responding with constancy and adaptability

Vietnam has not protested sharply, instead applying the principle “unchanging in fundamentals, flexible in application”  -  where the “unchanging” is the goal of “Independence – Freedom – Happiness” set since 1945. For national independence, the people’s freedom, and citizens’ happiness, Vietnam is ready to overcome any challenge with the strength of 4,000 years of history and today’s aspirations.

The key is first to define a “common denominator” between the two market economies to avoid talking past each other.

A common denominator not yet complete

The US still has not granted Vietnam full market economy status, though recently Washington acknowledged Vietnam does not manipulate its currency. Significant differences remain, with US concerns that Vietnam could follow China’s model  -  a path the US actively counters.

In reality, Vietnam pursues a socialist-oriented market economy with key distinctions. China aims to surpass the US economically, fueling fierce rivalry; Vietnam seeks cooperation in line with its Strategic Partnership.

Trade figures bear this out: Vietnam’s surplus with the US comes largely from its competitive exports, while high US product prices limit imports into Vietnam. US investment in Vietnam remains low, which also limits US goods and technology imports, tilting the trade balance toward Vietnam. Meanwhile, large Chinese investment drives Vietnam’s trade deficit with China.

From “cold” to “warming” ties

Since the lifting of the US embargo, Vietnam’s economy has made strong gains, with bilateral trade a bright spot. The two countries now share more common ground  -  both market economies within a Comprehensive Strategic Partnership  -  one focused on “MAGA,” the other on “Rising to New Heights.”

While early meetings in history were clouded by war, today’s are framed by cooperation. Investment remains the missing link, but momentum is building. In March 2025, the US–ASEAN Business Council brought 30 major corporations  -  including Boeing, Apple, Intel, Nike, Coca-Cola, Amazon, and Meta  -  to Vietnam, hinting at new investment flows. This could lead to “Made in Vietnam” goods produced by US firms entering the American market, balancing trade.

Opportunities from position and resources

Both nations see each other’s strategic role in global supply chains, especially in sectors where they can collaborate rather than compete. With Northeast Asia facing instability, Vietnam is a strategic hub for US production, research, and development relocation. It’s not unrealistic to imagine Elon Musk making major investments in Vietnam or an “Asian Silicon Valley” taking root here.

Vietnam views FDI not just as a business model but as a strategic economic pillar. US goods and services made in Vietnam could be re-exported to the US, helping balance trade.

From 46% to 20%  -  and possibly 0%

Even when the US imposed a 46% tariff on Vietnamese goods, Vietnam kept its tariff on US goods at 0%. In August 2025, the US reduced the rate to 20%  -  aligned with the current common denominator and viable for the medium and long term.

Vietnamese exports to the US have evolved from agriculture and light industry to heavy industry 2.0–3.0, and now to Industry 4.0 technology. Vietnam’s advantages  -  rare earths, bauxite, energy, transport–port–aviation infrastructure, young workforce, competitive labor costs, and especially political–social stability  -  combine well with US technological strengths. This foundation could stabilize trade without the need for tariff “blows.”

Dinh Duc Sinh