The Curious Case of the “America First” Trade Policy in Vietnam

In the past year, as the Trump administration has taken action to implement its “America First” trade policy, Vietnam has found itself in an essentially unique and difficult position. On the one hand, it has one of the largest bilateral trade surpluses with the United States, smaller than only China and Mexico. On the other hand, it lacks China’s ability to successfully push back on strong U.S. action and Mexico’s privileged place as a member of the United States–Mexico–Canada Agreement, under which most trade has been exempted from U.S. tariffs.

Vietnam’s large bilateral trade surplus with the United States makes it a key target for action in the America First trade policy, the stated objective of which is to correct “unfair and unbalanced trade,” or large trade deficits, in U.S. trade flows. This has taken the form of Agreements on Reciprocal Trade (ARTs), under which a country makes significant market-opening concessions to the United States and commits to aligning its economic security measures with U.S. trade actions against China—while accepting high U.S. tariffs in return. Vietnam was assigned a 20 percent “reciprocal” tariff on top of preexisting U.S. tariffs under the International Emergency Economic Powers Act until it was overturned. The Trump administration is now seeking to apply the tariffs using other trade statutes.

Though Vietnam is in a similar position as its Southeast Asian neighbors in that it lacks significant negotiating leverage with the United States, it is much more exposed economically than any of these other countries: The U.S. trade deficit with Vietnam grew to $178 billion in 2025, far larger than any other Southeast Asian nation (the second highest, Thailand, had a deficit of $71.9 billion). Vietnam additionally lacks the ability to defray tariffs by pledging investment in the United States that large Asian economies of Japan, South Korea and Taiwan have (as well as the European Union).

While the United States has been able to reach ARTs with key East Asian economies—Cambodia, Indonesia, Japan, Malaysia, South Korea, and Taiwan—it has not yet concluded one with Vietnam, though a more general framework has been agreed. Vietnam’s failure to conclude an ART—unlike most of its regional peers—is likely due in large part to the far greater economic stakes involved for Vietnam in reaching a satisfactory agreement with the United States.

However, it now appears that the United States is working to ratchet up the pressure on Vietnam to conclude a bilateral ART, sending a delegation to Hanoi in May 2026 armed with new leverage: Vietnam was the only country selected by the Office of the U.S. Trade Representative as a “Priority Foreign Country” (PFC) under its 2026 Special 301 Report identifying global intellectual property priorities. Vietnam does indeed have a series of unresolved intellectual property issues with the United States, some of them long-standing. That said, no country has been selected to be a PFC under this process for over a decade, and there has been no other section 301 intellectual property investigations even outside of this process since the 2018 case on China. It thus does appear relevant that of the countries reviewed in USTR’s report, Vietnam has one of the largest trade deficits and also has not concluded an ART, clearly a top trade priority for the United States. But does the decision to focus leverage on Vietnam make sense when considering U.S. economic interests?

Are U.S. Imports from Vietnam a Problem?

In its various meetings to negotiate an ART with Vietnam this past year, U.S. trade officials have made clear that the central problem they are working to solve is the large size of its trade surplus with the United States, and the U.S. concern that it will be a destination for Chinese trade or investment seeking to circumvent U.S. trade actions on China. This begs the key question of whether Vietnam’s large trade surplus with the United States and its proximity to China legitimately constitute a threat to the U.S. economy. It seems that the deficit’s magnitude is prima facie evidence to the administration that bilateral trade with Vietnam is harmful. To assess the merits of this conclusion, it is worth taking a closer look at the level, growth, and composition of imports from Vietnam to examine the impact they are having or could have on the U.S. economy.

A few key facts using data from the U.S. International Trade Commission provide a good picture of the overall nature and impact of Vietnamese imports:

• Overall Level and Growth of Imports: Since the signing of the U.S.-Vietnam Bilateral Trade Agreement in 2000, U.S. goods imports from Vietnam have grown dramatically from $1 billion in 2001 to $193 billion in 2025, a compound annual growth rate (CAGR) of 23 percent over that period. Its growth over the past 10 years was actually slower, at 11 percent CAGR.

  To keep these numbers in context, while Vietnam’s bilateral trade surplus with the U.S. was one of the largest in the world at $178 billion in 2025, Vietnam’s share of total U.S. global imports in 2025 ($3.4 trillion) was just 5.6 percent. Vietnam’s imports as a share of U.S. GDP were 0.6 percent.

• Composition of Vietnamese Imports: Imports from Vietnam are highly concentrated in a few key sectors. Out of 96 import categories, the top 25 account for 97 percent of imports, the top 10 account for 88 percent, and just the top 2 categories account for 60 percent of total U.S. imports from Vietnam in 2025.