In response to the US government's plan to impose a 46% tariff on Vietnamese goods, companies in Vietnam’s $11 billion export industry are not standing still. Exporters are actively negotiating and expanding their reach into new markets around the globe.

In 2024, Vietnam set historic records in exports of coffee, cashew, and pepper, reaching $5.62 billion, $4.34 billion, and $1.31 billion respectively. The US is the largest importer of these goods, so the proposed tariff has come as a shock to exporters, far beyond expectations.

No waiting - flying to the US for negotiations

Speaking with VietNamNet on April 9, the CEO of a Vietnamese coffee exporting company shared that their exports to the US last year were nearly 2.6 trillion VND (approx. $105 million), accounting for about 10% of their total export turnover.

Upon learning of the proposed 46% US tariff on Vietnamese goods, the company immediately pivoted toward new potential markets. Just yesterday, they received promising news from a new partner in Germany. Meanwhile, they are also negotiating with existing US buyers to find mutually beneficial solutions for ongoing contracts.

Phan Minh Thong, Chairman of Phuc Sinh Group, acknowledged that the US tax policy would impact many of Vietnam’s major sectors, such as textiles, home goods, furniture, seafood, and machinery.

Phuc Sinh exports coffee, pepper, and cashew nuts. However, Thong emphasized that the US does not produce pepper, and coffee and cashews are also not its strengths. “If Americans want to consume these products, they’ll have to pay more. Our customers are the ones paying the tariff,” he explained.

Nevertheless, he stressed that difficulties are part of life, and the only solution is to adapt and move forward. “We don’t have many options. Worrying won’t solve anything. Instead, we must do everything we can to find new orders and explore all possible markets.”

In 2024, Phuc Sinh will export 30,000 tons of pepper to 102 markets, including the US, Brazil, and Europe. “We just closed a deal to export pepper to Canada, and we're still exporting to the US as usual. We’re the top pepper exporter to the US. If they don’t buy from us, who will they buy from?” Thong said.

Phung Van Sam, representative of the Vietnam Pepper and Spice Association (VPSA), said the US accounts for about 30% of Vietnam’s pepper export turnover. The sudden news of a 46% tax left exporters in this “black gold” industry stunned. Many contracts were halted or canceled due to fears of increased costs.

With this level of taxation, countless Vietnamese farmers could be affected.

The VPSA Chairman is currently in the US for direct negotiations with partners. The American Spice Trade Association has also urged the US government not to impose the 46% tariff on Vietnamese pepper and spices, Sam added.

Shifting focus to new markets

Bach Khanh Nhut, Vice Chairman of the Vietnam Cashew Association, stated that after learning of the new tariff proposal, US partners informed Vietnamese cashew exporters that existing contracts and shipments already en route to the US would remain unchanged.

However, for shipments that are scheduled but haven’t yet departed, US partners have requested a temporary hold while they await clarity on how former President Donald Trump's tariff policies will be applied. A 46% tariff would directly affect US buyers due to drastic changes in product pricing.

According to Nhut, the US has been Vietnam’s number one cashew export market for the past decade, accounting for 25–27% of total revenue. As such, the industry will certainly be impacted.

Still, every crisis presents an opportunity. Nhut highlighted the promising and emerging market of the Middle East. Cashew exporters are already adjusting their export strategies to focus more on this region and aggressively pursue new market opportunities.

In the long run, Vietnam also maintains stable relationships with other markets, facilitating smoother entry for exporters. Nhut believes the Middle Eastern market has enough potential to offset losses from the US, allowing the cashew sector to remain relatively stable compared to other affected industries.

However, the presence of Vietnamese embassies and trade counselors in these emerging markets remains limited, unlike in long-established markets. As a result, the Vietnam Cashew Association and businesses in the industry are calling for greater support - such as assigning commercial counselors to the Middle East to provide regular updates on market conditions, tax policies, investment incentives, and import-export procedures.

With that information, the Vietnam Cashew Association can help businesses act quickly to minimize losses from the US market.

Tam An