Recently, domestic corporations are keenly observing the ongoing reciprocal tariff negotiations between the United States and Vietnam. Several corporations, including Samsung Electronics, are currently operating in Vietnam, and if the Donald Trump administration imposes high tariffs on Vietnamese products, they will likely face significant impact.
According to Reuters on the 23rd, Eric Trump, the son of President Trump, attended the groundbreaking ceremony for a $1.5 billion (approximately 2.7 trillion won) luxury resort complex being developed in Hung Yen Province, northern Vietnam, on the 21st. The construction project of this resort is a business venture of the Trump Organization, and Eric Trump serves as the vice president of this company.
Vietnamese Prime Minister Pham Minh Chinh also attended the groundbreaking ceremony and noted that "this project will further strengthen the friendly relations between the United States and Vietnam."
After the resort's groundbreaking ceremony, Eric Trump moved to Ho Chi Minh City, where he met with Vietnamese government officials and corporations. The Trump Organization is promoting the construction of Trump Tower, a large commercial building in Ho Chi Minh City. Some domestic corporations, including Goo Bon-kyu, representative of LS Cable & System, also reportedly attended a dinner hosted by Eric Trump in Vietnam.
A business industry representative noted, "Not only Vietnamese corporations but also domestic corporations hope that Eric Trump's visit to Vietnam will help achieve positive results in trade negotiations with the United States."
The United States and Vietnam have been conducting a second round of trade negotiations in Washington, D.C., since the 20th. Previously, on the 2nd of last month, the Trump administration announced that it would impose reciprocal tariffs on major trading partners, while stating that the implementation would be postponed for 90 days.
The Trump administration announced it would apply a 46% tariff rate on imports from Vietnam. This is higher than the rates for South Korea (25%), India (26%), Malaysia (24%), Thailand (36%), and Indonesia (32%). The tariff rate applied to Vietnam is the sixth highest among 185 U.S. trading partners and the highest among the top 13 countries that account for more than 1% of U.S. total revenue.
The United States and China agreed on the 12th of this month to suspend tariffs, which had initially exceeded 100% on both sides, for 90 days. As a result, the U.S. will lower the tariff to 30% against China, while China will reduce the tariff to 10% against the U.S.
Domestic corporations consider how much the Vietnamese tariff will decrease to be more important. This is because Vietnam has become more significant than China as a production base for products destined for export. For a long time, domestic corporations have operated factories in China, but rising expenses, including labor costs, and strengthened regulations by the Chinese government after the deployment of the Terminal High Altitude Area Defense (THAAD) system in 2017 have led many corporations to turn their attention to Vietnam.
Samsung Electronics produces major electronic products such as smartphones and TVs in Vietnam. In particular, the majority of the smartphones exported to the U.S. are produced in Vietnam. Major IT affiliates of LG Group, including LG Electronics, LG Display, and LG Innotek, also maintain production bases in Vietnam.
POSCO operates rebar and cold-rolling product factories in Vietnam, while HS HYOSUNG is producing spandex and tire cord. Hanwha Aerospace also has an aircraft engine and parts factory in Vietnam, and various mid-sized and small corporations like Hansei Industry produce various products, including clothing, in Vietnam and export them to the United States due to lower labor costs.
A business industry representative stated, "Since the late 1990s, the entry of domestic corporations into Vietnam has actively progressed, and now Vietnam's share in total production has surpassed that of China," adding that "if negotiations are not concluded during the U.S. tariff suspension period, the export routes to the United States from Vietnam will be blocked, which will inevitably deal a huge blow to the domestic industry."
Vietnam is striving to reach an agreement in trade negotiations with the United States. Nguyen Hong Dien, the Minister of Industry and Trade of Vietnam, who visited the U.S. for negotiations, reportedly met with executives from major U.S. companies such as Google, Lockheed Martin, and SpaceX. He also mentioned that U.S. liquefied natural gas (LNG) is needed for the construction of Vietnam's gas-fired power plants.