The United States negotiated significant reductions in tariff rates for many important U.S. exports in the context of Vietnam’s entry into the WTO in January 2007. As a result, the vast majority of U.S. exports now face tariffs of 15 percent or less.
Vietnam agreed to join the WTO Information Technology Agreement upon accession and, as a result, has eliminated tariffs on information technology products. Vietnam also reduced tariffs on 80 percent of the products covered by the WTO Chemical Harmonization Agreement. In 2008, Vietnam reversed course on tariff reductions on a number of imports, including meat and poultry, and automobile and automobile parts, all of which had been lowered in 2007. In 2009, Vietnam raised tariffs on paper, meat, steel and fertilizer.
Vietnam currently has four categories of tariff rates: (1) normal trade relations (NTR) / most favored nation (MFN) rates that apply to all WTO Member countries, including the United States; (2) Common Effective Preferential Tariff rates that apply to imports from ASEAN countries; (3) preferential tariff rates applied under Vietnam’s FTAs; and (4) general tariff rates (50 percent higher than NTR/MFN) that apply to all other countries.
The National Assembly sets tariff bands for each product, while the Ministry of Finance, typically with oversight from the Office of Government, adjusts applied tariffs within the bands.