Vietnam: High US export dependency, maximum diplomacy

Countries with high exposure to US markets are moving quickly to preserve trade ties. Vietnam, whose economy is among the most export-dependent in the region, with the US as its largest single export market, has taken pre-emptive steps to demonstrate goodwill and alignment with American trade priorities. On March 31, it issued Decree 73, lowering most-favoured-nation (MFN) tariff rates on essential goods to align its tariff structure with international norms and enhance trade competitiveness, particularly for US exporters who lack preferential access in the absence of a free trade agreement. At the diplomatic level, Vietnam has also been proactive. In a high-level meeting on March 14, Industry and Trade Minister Nguyen Hong Dien and US Trade Representative Jamieson Greer signed cooperation agreements and purchase contracts valued at US$54.3 billion, covering machinery, raw materials, aviation, energy, and petrochemicals. Further contracts worth US$36 billion are reportedly under negotiation, potentially raising total commitments to US$90.3 billion.

Extending beyond that, on March 27, ahead of any official announcement from the Trump administration on new trade policies, Vietnam moved to reduce import duties on several American goods, including liquefied natural gas, automobiles, and ethanol. The timing of these tariff reductions underscores Vietnam’s broader strategy to avoid punitive measures and reinforce its role as a responsible trading partner. While it may not have yielded immediate results, the "reciprocal" tariff rate alone does not determine the success or failure of Vietnam’s policy. It remains to be seen if Vietnam’s tariff diplomacy will work.

Japan, South Korea, and ASEAN: Moderate US export dependency, measured diplomacy

Japan, where 25% of exports go to the US, responded to US tariffs by ramping up However, it is important to note that while Japan has signalled openness to certain trade concessions with the US, it remains firm in its goal of securing full tariff removal from the Trump administration and has notified the WTO of potential retaliatory measures.