The Donald Trump administration has suspended the reciprocal tariff for 90 days and is seeking to finalize tariff negotiations with major trading partner countries during this period. Accordingly, leaders of various countries are purchasing American products or accelerating administrative procedures with the U.S. to yield positive results in the tariff negotiations.
According to The Wall Street Journal (WSJ), Vietnam recently signed a financial contract worth $300 million (about 425.9 billion won) for the purchase of new aircraft from American aircraft manufacturer Boeing. Additionally, Elon Musk, a close associate of President Trump, is pushing through approvals for the satellite internet service Starlink and has expedited the approval for the construction of a resort exclusively for President Trump, valued at $1.5 billion.
Vietnam has been subject to a 46% reciprocal tariff from the United States. This is because, during the first U.S.-China trade war from 2018 to 2019, Vietnam emerged as a route for exports bypassing China, thus becoming the largest trade deficit country for the U.S. Vietnam recorded a trade surplus of $123.5 billion (about 176 trillion won) with the U.S. last year, which is twice the deficit with China.
Demand for American goods and services is also increasing in other regions. Thailand has suggested increasing its purchases of U.S. corn feed, while the European Union (EU) may increase its purchases of U.S. soybeans and LNG. South Korea is also considering U.S. participation in the development of liquefied natural gas (LNG) in Alaska as one of its negotiation cards for reducing tariffs.
India has plans to increase trade with the U.S. to $500 billion (about 711 trillion won) by 2030. Last week, Israeli Prime Minister Benjamin Netanyahu, who visited the White House, stated that he aims to eliminate the existing trade surplus of $7.4 billion (about 11 trillion won) with the U.S. According to WSJ, Thailand, Vietnam, and Malaysia have expressed intentions to advance tariff negotiations by considering purchases of American products from Argentina, a major grain importing country.
WSJ reported, "Many of America's trade partners have planned to purchase more American products to prevent the re-imposition of tariffs on U.S. exports," adding, "This promise came as Washington began initial tariff negotiations targeting the UK, Australia, South Korea, India, and Japan last week."
It remains uncertain whether increasing purchases of American products and services will favor tariff negotiations. During the tariff war initiated under the Trump administration’s first term, some countries used purchasing American products as a negotiation tactic, but there have been instances where these were not honored, leading to a lack of trust in President Trump.
In fact, after engaging in a tariff war with the U.S. from 2018 to 2019, China signed a phase one agreement that included commitments such as opening its agricultural market, protecting U.S. intellectual property rights, and increasing purchases of U.S. products and services worth $200 billion by 2021. However, the U.S. Trade Representative (USTR) stated in a report released last month that China did not comply with the agreement.
There is also an analysis suggesting that the Trump administration desires more than just an increase in U.S. product exports. Wendy Cutler, vice president at the Asia Society Policy Institute, noted, "While noticeable purchases of American products are welcome, their effect may be temporary," adding that the Trump administration seeks to induce large-scale investments from the U.S., remove non-tariff barriers, and take measures against China.