U.S. temporarily maintains 10% tariff on Vietnamese goods; many items exempted from countervailing duties

Washington – Hanoi (Mid-May 2025 Update) – Amid the United States’ new countervailing tariff policy affecting over 150 countries, Vietnam remains in the group temporarily exempted from the high 46% tariff and is only subject to an additional 10% tariff until the end of June 2025. Notably, several Vietnamese products are completely exempted from countervailing duties, effectively enjoying a 0% tax rate.

Products exempted from countervailing duties

According to the official list from the White House (April 3, 2025), the U.S. has excluded the following categories of Vietnamese imports from countervailing tariffs:

- Strategic metals already subject to specific tariffs: Vietnamese steel and aluminum are only subject to Section 232 tariffs (25% and 10%, respectively), with no additional 46% countervailing tax. Copper and gold are also on the exemption list.

- Medical and technological goods: Pharmaceuticals, vaccines, semiconductors, and certain electronic components are exempted from the new tariffs as the U.S. prioritizes supply chain security.

- Energy, minerals, and essential raw materials: Oil, LNG, ethane, and critical minerals (such as bullion gold) are exempt to help stabilize U.S. domestic production.

- Humanitarian and civil-use goods: Items such as personal communication devices, aid goods, published materials, gifts, and tourism-related products are exempted under legal provisions (50 USC 1702(b)).

The total global import value of exempted items under the new U.S. policy is estimated at up to USD 644 billion.

Vietnam and the U.S. continue negotiations

After the U.S. announced the 46% tariff in early April, Vietnam proactively proposed reducing all import tariffs on U.S. goods to 0%, while refraining from retaliatory measures and increasing imports of strategic products such as aircraft, energy, and agricultural goods.

These efforts helped Vietnam secure a 90-day delay in the implementation of the 46% tariff, during which a 10% rate will apply until July 2025.

The two countries are continuing high-level negotiations aimed at a bilateral trade agreement that could allow Vietnamese goods to be entirely exempted from countervailing duties and enjoy a long-term 0% tax rate. The U.S. also highly values Vietnam’s commitment to combatting trade fraud, controlling origin certification, and maintaining monetary policy stability.

Outlook
If negotiations yield positive results, Vietnam may continue to benefit from preferential or 0% tariff rates for many of its exports to the U.S. Conversely, if no consensus is reached, the 46% tariff may automatically take effect after July 2025.

Impact of U.S. Countervailing Tariffs (46% Temporarily Suspended) on Vietnam’s Exports to the Czech Republic and EU

Traditional import-export items between Vietnam and the Czech Republic/EU
Vietnam and the European Union (EU) share vibrant trade relations with many key product categories. Specifically, for the Czech Republic (an EU member), Vietnam’s traditional exports include:

- Textiles and garments: A long-standing key export sector. Czech and EU demand for Vietnamese apparel is high. Czech Minister of Industry and Trade Lukáš Vlček once emphasized the strong Czech demand for Vietnamese textile products. Exports of textiles to the EU grew impressively (up 43.4% in 2022 vs. 2021), thanks to tariff advantages from the EVFTA.

- Footwear: Vietnamese leather and footwear products have a strong presence in the EU. Footwear is one of Vietnam’s main export items to the EU, with nearly 100% utilization of preferential origin certification (EUR.1 form). Czech consumers favor Vietnamese footwear for its good quality and affordable pricing. In 2022, exports of footwear to the EU increased by nearly 49.7%, reflecting its strong market appeal.

- Electronics and components (especially mobile phones): This is currently Vietnam’s largest export group to the EU. “Made in Vietnam” electronics and phones are popular in the Czech Republic and other EU countries. Products like computers and electronic parts also significantly contribute to trade. For example, in 2023, Vietnam exported about USD 3.3 billion in goods to the Czech Republic, mainly agricultural products (coffee, rice, pepper, rubber), seafood, textiles, handicrafts, and computer components.

- Wood and wood products: Vietnamese furniture and handicrafts are increasingly penetrating the EU. After EVFTA, wood and wood product exports to the EU surged by 85.2% (in 2022). Products such as household furniture and office interiors made in Vietnam are highly valued in the EU for craftsmanship and competitive prices.

- Agricultural products and food: These are traditional strengths of Vietnam in the Czech and EU markets. Tropical agricultural products like coffee, rice, cashews, pepper, and tea are consistently exported. Vietnamese coffee is globally renowned and highly favored in the Czech Republic. In addition, Vietnamese seafood (shrimp, pangasius, basa) and fruits and vegetables are gaining more visibility in the EU (in 2022, seafood exports rose by 29.5%, and fruit/vegetable exports by 34.2%).
In return, Vietnam imports mainly machinery, technology equipment, pharmaceuticals, chemicals, and production materials from the Czech Republic/EU — supporting domestic manufacturing.

Opportunities and Challenges in the Czech Market amid U.S. Tariff Pressure on Vietnamese Goods

The U.S. has recently moved to tighten tariff policy on Vietnamese goods. Specifically, Washington is considering imposing a “countervailing” tariff of up to 46% on imports from Vietnam, although this decision is currently suspended until July 2025.

If this punitive tariff takes effect, Vietnam’s exports to the U.S. — its largest export market — will be heavily impacted, forcing businesses to seek alternative markets. In this context, the Czech Republic and the broader EU emerge as potential alternatives, bringing both opportunities and challenges:

Opportunities

- Leverage EVFTA to expand market share: The EU–Vietnam Free Trade Agreement (EVFTA), effective from August 1, 2020, offers valuable access to the EU market. Numerous tariff lines have been reduced to 0%, making Vietnamese goods more price-competitive. In the face of difficulties in the U.S. market, the EU (including the Czech Republic) under EVFTA presents a “lifeline” to sustain export growth.

- Positive reception in the Czech market: The Czech Republic is considered a crucial gateway for Vietnamese goods to enter deeper into the EU. Czech consumers hold favorable views toward Vietnamese products — from agricultural items (rice, coffee) to consumer goods (footwear, clothing) — due to improving quality. Moreover, the large Vietnamese community in the Czech Republic (over 80,000 people) creates an effective distribution and promotion network for Vietnamese goods.

- Market diversification, reducing U.S. dependence: The U.S. tariff hike forces Vietnamese enterprises to diversify export markets, reducing concentration risks. The EU is Vietnam’s third-largest export market (~13.6% of total exports), with ample room for growth. Additionally, the recent U.S.–China trade tensions have encouraged supply chain shifts away from China to other countries, including Vietnam. This trend, combined with EVFTA, could boost Vietnam’s exports to the EU/Czech Republic, as some orders may be redirected from the U.S.

Challenges

- EU’s limited absorption capacity: Despite its potential, the EU cannot fully replace the U.S. market in the short term. Vietnam’s exports to the U.S. are vast (with a trade surplus of USD 123.5 billion in 2024). Redirecting a significant volume to the EU may increase competition and exert downward price pressure. Businesses need to actively seek new EU partners and develop products suited to local preferences for sustainable market expansion.

- Quality standards and compliance costs: The European market is known for its strict standards on product quality, food safety, and traceability. Czech businesses have frankly suggested that Vietnamese exports need to improve quality and competitiveness. Meeting regulatory requirements (e.g., origin certification, labor and environmental standards) may raise compliance costs, affecting profitability.

- Procedures and market understanding: Although EVFTA offers tariff advantages, many Vietnamese enterprises have yet to optimize its benefits. Customs procedures, origin documentation, and lack of information about the Czech market can limit access. Small and medium-sized enterprises, in particular, struggle with meeting administrative and legal requirements for exporting to the EU. Therefore, improving market understanding and streamlining export processes are essential to overcoming these hurdles.