U.S. Demands Vietnam Lower 10% VAT, Address Non-Tariff Barriers

White House trade advisor Peter Navarro has suggested that Vietnam needs to lower its value-added tax and tariffs, indicating that the current measures are insufficient to address the trade imbalance between the two countries. Navarro's comments come in response to Vietnam's proposal to eliminate tariffs on U.S. products, a move he described as "meaningless" due to Vietnam's use of value-added tax as a trade barrier. He emphasized that even if tariffs were reduced to zero, the U.S. trade deficit with Vietnam would still amount to approximately $120 billion. Navarro's remarks underscore the administration's focus on non-tariff barriers, such as dumping and export subsidies, which he believes are the core issues driving the trade imbalance.

Navarro's statements were made in the context of ongoing trade tensions between the U.S. and Vietnam. The Vietnamese Communist Party leader had written to President Trump proposing the elimination of all tariffs on U.S. imports and requesting a delay in the implementation of the 46% tariffs announced by Trump. However, Navarro's response was clear: the U.S. would not be satisfied with mere tariff reductions. He highlighted that the problem lies in Vietnam's non-tariff practices, including dumping and export subsidies, which he described as "non-tariff cheating."

Navarro's comments reflect a broader strategy by the Trump administration to address what it sees as unfair trade practices by its partners. He warned that the U.S. would not engage in negotiations unless these non-tariff issues were addressed. He specifically called out Vietnam for its 10% value-added tax and false standards, which he believes are used to create barriers to U.S. exports. Navarro also mentioned other countries, urging them to reduce their value-added taxes and eliminate non-tariff barriers that hinder U.S. agricultural products from entering their markets.

The administration's stance on trade has been consistent: it views the current trade deficits as a national emergency and is unwilling to engage in traditional negotiations until these underlying issues are resolved. Navarro's remarks serve as a clear message to Vietnam and other trading partners that the U.S. is focused on addressing non-tariff barriers and will not be swayed by superficial concessions on tariffs alone. The administration's approach underscores its commitment to protecting U.S. industries and workers from what it perceives as unfair trade practices.