Vietnam cuts import taxes on key goods ahead of US tariff announcement

Several wood products imported from the US have has their import taxes reduced to 0% starting March 31. (Photo: thanhnien.vn)

Hanoi – As the US government prepares to announce reciprocal tariffs on other nations on April 2, Vietnam has proactively reduced import taxes on a wide range of products, demonstrating its strong trade commitment.

0% import tariff on US wood and wooden products

On March 31, the Vietnamese Government issued Decree No. 73/2025, amending preferential tax rates on several key imports. Among the notable changes, taxes on goods such as automobiles, wood products, ethanol, frozen chicken thighs, pistachios, almonds, fresh apples, cherries, and raisins have been significantly reduced.

Import taxes on automobiles, for instance, have dropped from 64% to 50% and 45% to 32%, while ethanol taxes have been cut from 10% to 5%. Frozen chicken thighs now carry a 15% tax (down from 20%), and popular items like pistachios, almonds, fresh apples, and cherries have seen reductions from 8–15% to just 5%.

The most striking move, however, is the slash of import taxes on wood and wooden products, including coat hangers, chairs, and furniture, from 20–25% to a uniform 0%.

The decree took effect immediately on March 31.

The Vietnam Timber and Forest Products Association (Viforest) and the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA) had previously recommended revising the import tariffs on US wood products to minimise risk of potential retaliatory tariffs from the US.

The quick response from Vietnam has won approval from industry leaders. A HAWA leader told the Thanh Nien (Young people) newspaper that the tax cuts were a "swift, positive, and timely" move, showcasing Vietnam’s goodwill. In reality, the trade relationship between Vietnam and the US in wood and wood products is mutually beneficial, with Vietnam being both a leading supplier of timber and wood products for the US and an important importer of similar items from the US.

According to Viforest, although wood products have just been imported into Vietnam in recent years, the import value has grown rapidly. In 2024, Vietnam spent 316.3 million USD on US wood imports, a 32% increase in quantity and over a 34% rise in value compared to 2023. Vietnam is now the second-largest consumer of US wood in Asia and the fourth-largest globally.

Nguyen Thanh Phong, Director of Thien But Manufacturing and Trading Service Co., welcomed the reduction in the import tariff on frozen chicken thighs, which had previously stood at 20%. With domestic production covering only 40–45% of the market, Vietnam relies on imports, particularly from the US – the largest provider at present, for the rest. The tax cut will benefit consumers, especially large-scaled buyers like industrial kitchens.

Boosting US investment in Vietnam

The Government’s decision to reduce import taxes is part of broader efforts to encourage US imports and reduce the trade imbalance between the two countries. Representatives of Vietnam and the US have been engaging in frequent talks to discuss new trade measures and fine-tune policies to mitigate any potential tariff risks.

Alongside these tax cuts, Vietnam has also approved agreements to allow US companies to operate in the country. Notably, US tech giant SpaceX has received approval for the pilot deployment of its Starlink satellite internet service in Vietnam.

Prof. Dr. Vo Xuan Vinh, Dean of the Institute for Business Research at the University of Economics Ho Chi Minh City, highlighted that the recent tax cuts and the approval of Starlink services have attracted significant attention from the new US administration. These moves reflect Vietnam’s efforts to create a more favourable environment for US investments.

However, Vinh emphasised that to fully capitalise on opportunities, Vietnam must continue to simplify investment procedures, optimise infrastructure for the tech sector, and introduce groundbreaking policies to attract US capital. Simultaneously, the Government must ensure that domestic businesses grow stronger and gain a foothold in the global market.

Assoc. Prof. Dr. Nguyen Thuong Lang from the Institute of International Trade and Economics at the National Economics University noted that the US reciprocal tariff strategy may be short-termed. He commended the swift actions of Vietnamese authorities but warned that some other industries such as electronics, machinery, textile-garment, and footwear, could also face challenges if the US imposes additional tariffs since many Vietnamese exporters rely heavily on the US market for their revenue.

Lang suggested several measures for Vietnam to move forward: further diversifying trade markets to reduce overdependence on certain markets, increasing cooperation with US companies to boost exports, and expanding the import of advanced medical equipment, liquefied gas, consumer goods, and farm produce for animal feed production. He also recommended incentivising new investors applying imported US machinery and technologies./.