Vietnam Sets New Record for Trade Surplus with US Amid Trump Tariffs

Vietnam has recorded a record goods trade surplus of approximately $114 billion with the United States in the first half of 2026, surpassing China, Mexico, and Taiwan to become its largest surplus partner, according to US government data. Experts suggest this indicates that despite former President Donald Trump's tariff policies aimed at reducing the trade deficit, the flow of goods from Asia into the US remains strong. Since early 2025, former President Trump has implemented retaliatory tariff policies on imports from trading partners, with the stated goal of addressing the large and persistent US trade deficit. Initially, a 46% tariff was announced for Vietnam. Following a 90-day grace period, this was reduced to 10%, and then increased to 20% effective August 7, 2025. Most recently, in late July 2026, President Trump imposed new tariff policies on 60 economies, including a 12.5% tariff on Vietnam, linked to the US enforcement of a ban on goods produced by forced labor, but also seen as part of the administration's strategy to reshape Washington's trade relationships through tariffs. Analysts attribute the widening trade deficit with the US not only to the issue of "Chinese goods disguised as Vietnamese goods" to evade US tariffs, as Washington often alleges, but also to the ongoing shift of production to Vietnam. In the first half of 2026, Vietnam's exports to the US surged 40% year-on-year to $123 billion, while imports from China decreased. When including services, Vietnam also emerged as the partner contributing to the largest US trade deficit in the second quarter, at $61.2 billion, higher than Taiwan ($53.1 billion) and Mexico ($52.7 billion). Specifically, in July alone, the US goods trade deficit with Vietnam reached a record approximately $24.8 billion, second only to Mexico's $27.5 billion, according to US Census Bureau data. Taiwan followed with $18.1 billion, China with $15.2 billion, and South Korea with $10.4 billion. Overall goods and services, the US trade deficit in July increased by 24.4%, from $71.2 billion in June to $88.6 billion. Imports rose 2.8% to $399.3 billion, while exports fell 2.1% to $310.7 billion. A notable driver of increased imports is the significant rise in capital goods, up $14.4 billion to a record $140.3 billion. Imports of computers increased by $6.9 billion, computer peripherals by $6.6 billion, and semiconductors by $1.2 billion. According to Reuters, this increase reflects strong investment by US companies in artificial intelligence and AI infrastructure, positioning Vietnam as an increasingly important supplier in this sector. Nikkei Asia reported that Vietnam led the increase in trade deficits with the US among 13 Asia-Pacific economies in July, as imports from the region continued to rise despite former President Trump's tariffs. Specifically, in the first seven months of the year, Vietnam exported approximately $320 billion, up 21.7% year-on-year, while imports increased by 34.8% to about $340 billion, resulting in a trade deficit of approximately $20.5 billion. The US is Vietnam's largest export market, while China is its largest import source. Nikkei Asia suggests that part of the reason is the trend of companies shifting supply chains from China to Vietnam and other Asian economies. The Wall Street Journal also commented that Vietnam has been benefiting from this process, owing to its increasingly important position in the global supply chain. Companies like Apple, Nike, and Lululemon have moved part of their production to Vietnam in recent years. For instance, US furniture company TOV Furniture reversed its sourcing strategy, increasing imports from Vietnam from 25% in 2024 to 60% by 2026, while reducing imports from China to 25%. These developments suggest that while tariffs can alter where goods are produced and sourced, they do not necessarily lead to an immediate reduction in the total volume of goods imported by the US, according to observers. Source: BBC Vietnamese