Vietnam Races to Strike U.S. Trade Deal Before July Tariff Deadline as Surplus Hits $12.2 Billion

As the clock ticks toward a crucial trade deadline, Vietnam’s Prime Minister Pham Minh Chinh has made it clear: a deal with the United States must be reached and fast.

Speaking candidly at the World Economic Forum in Tianjin, China on Wednesday, Chinh told panelists and global leaders that his government is working around the clock to secure a formal trade agreement with Washington before a critical tariff pause expires in early July.

At stake? A hefty 46% reciprocal tariff that, if reinstated, could severely disrupt Vietnam’s booming export economy.

“We are in frequent communication with the U.S.,” Chinh said during a session titled “Is Asia’s Century at Risk?” He emphasized Vietnam’s commitment to keeping trade ties stable and mutually beneficial.

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The urgency comes as Vietnam’s trade surplus with the United States soared to $12.2 billion in May, a jaw dropping 42% increase year over year and 17% rise from April, according to newly released government figures. Exports to the U.S. reached $13.8 billion a post-pandemic record.

Facing pressure from the Biden administration over illegal trans-shipment especially of Chinese goods relabeled in Vietnam Hanoi has taken several steps to clean up its trade practices. The government has also signaled willingness to reduce non-tariff barriers and open its market to more U.S. imports, from agricultural products and energy to American-made aircraft.

Still, no official purchase agreements have been signed and the clock is ticking.

With a potential tariff snapback looming, the next few weeks could define the future of one of Asia’s most dynamic economic relationships. And as both countries weigh strategy and diplomacy, one thing is clear: Vietnam is ready to deal and doesn’t want to wait.

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