VIETNAM Law and Practice Contributed by: Thang Nguyen, Minh Nguyen and Nguyet Le, ACSV Legal
to significant tariff reductions, with many tariffs being eliminated entirely, positioning Vietnam as one of the most open economies in Southeast Asia. Despite this openness, Vietnam continues to maintain strategic protections for selected sectors critical to its industrial development. Vietnam applies Most Favored Nation (MFN) tariff rates to imports from World Trade Organi - zation (WTO) members with which it does not have specific preferential trade agreements, including the United States. As of 2023, the average MFN applied tariff rate stood at 9.4% overall, with rates of 17.1% for agricultural prod - ucts and 8.1% for non-agricultural products. In contrast, FTA partners benefit from significantly reduced or eliminated tariffs, often as low as 0%, under Vietnam’s preferential treatment schemes. These preferential arrangements apply to coun - tries such as ASEAN members, Australia, Chile, China, Hong Kong, India, Japan, New Zealand, South Korea, and other CPTPP members. Strategic Sectoral Protection Although Vietnam has pursued broad tariff liber - alisation, it retains higher tariff barriers in specific sectors to support domestic industries. Tariffs are highest and most commonly imposed on products within five key areas: automotive, met - als, chemicals and plastics, essential consumer goods, and selected manufactured products. For instance, tariffs on vehicles and automotive parts are maintained to nurture Vietnam’s emerg - ing local manufacturing capabilities. Similarly, higher duties on aluminium, steel, and weld - ing materials support the development of the national metallurgical sector. In the chemical and plastics industries, tariffs are used to encour - age domestic production of products such as sorbitol, BOPP film, and diammonium phos - phate. Essential consumer goods, including
monosodium glutamate (MSG) and cane sugar, are also protected to promote local food pro - cessing industries. Other products, such as con - fectionery, sweeteners, walnuts, ketchup, inkjet printers, soda ash, and stainless steel, remain subject to relatively higher tariff rates as part of a broader strategy to maintain competitiveness and secure domestic supply chains. Trade Defence Instruments Alongside its tariff policies, Vietnam actively utilises trade defence instruments to counter unfair trade practices and to protect its domes - tic industries from adverse external impacts. The country employs anti-dumping duties to address artificially low-priced imports, counter - vailing duties (CVDs) to offset foreign subsidies, and safeguard measures to respond to sudden surges in imports that could harm domestic pro - ducers. These mechanisms play a vital role in maintaining a fair competitive environment, par - ticularly in sectors where Vietnam has achieved or is developing sufficient domestic production capacity. Vietnam actively employs several trade remedy mechanisms to maintain fair competition. • Anti-dumping duties – counter artificially low- priced imports. • Countervailing duties (CVDs) – address subsi - dised imports. • Safeguard measures – protect against sud - den import surges. These instruments are crucial for preserving market balance while Vietnam continues its integration into global markets, particularly for industries with sufficient domestic production capacity.
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