Vietnam leader says US deal close, denies re-routing China goods

VIETNAMESE President To Lam said his nation is “very close” to a trade deal with the US as he pledged to buy more high-tech goods like aircraft to narrow the trade gap ahead of talks with Trump administration officials in New York.

“One of the issues we need to discuss with US leaders, particularly the US president, is how to expedite negotiations toward an agreement on reciprocal, balanced and equitable tariffs between the two countries,” Lam, Vietnam’s top leader, said in an exclusive interview with Bloomberg TV’s Haslinda Amin on the sidelines of the UN General Assembly on Monday.

“Vietnam exports align with US demand without competing directly with US products,” said Lam, who is also Communist Party General Secretary.

Vietnam wants to import more US items to support industrial production although certain policy constraints persist on the US side, the president said.

Vietnam has spent months in protracted negotiations with the US over a final trade deal, with transshipment and non-tariff barriers emerging as the central sticking points. Vietnam runs one of the US’s largest bilateral trade surpluses, which Washington has used to pressure Hanoi as it seeks to narrow the imbalance.

“We understand the concerns on the US side about this issue. But I think there are opportunities to address the trade imbalance,” Lam said, in his first international broadcast interview since consolidating party and state control in April.

Vietnam wants to increase high-tech imports of US aircraft, nuclear power and road and railway infrastructure, the president added.

US trade officials have pressed Vietnam to strengthen rules of origin, customs enforcement and controls on Chinese inputs over concerns about allegations that Chinese goods are being repackaged and rerouted through its manufacturing neighbour.

In recent months, US customs inspectors have carried out spot checks on China-linked factories in the South-east Asia nation, adding to concerns the White House may soon find reasons to saddle Vietnam with higher tariffs.

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“We do not accept transshipment of goods,” Lam, 69, said. “Trade must be genuine, with products actually manufactured in Vietnam and meeting international standards and our requirements, not only for the US market, but also for other international markets where Vietnam has participated.”

Vietnam was singled out for three simultaneous so-called Section 301 investigations and currently faces a 12.5 per cent levy as one of around 60 nations targeted in a US probe into goods produced with forced labour. It’s also under scrutiny for alleged excess manufacturing capacity and intellectual property violations. 

The preliminary results of the US investigations are progressing well, Lam said, when asked if Vietnam is confident it can avoid higher tariffs. Vietnam has repeatedly defended its trade practices, enacted a new law prohibiting goods produced with forced labour, tightened customs procedures and launched crackdowns on online piracy and other IP-related offences. 

Under Lam, Vietnam has pursued a vigorous diplomatic agenda with the president embarking on a raft of overseas trips aimed at diversifying trade and energy partners, as well as cementing Vietnam’s position as a middle power.

This year he’s travelled to China, Russia, India, France and across the region, as well as delivering a keynote speech at the Shangri-La Dialogue in May.

In his address to leaders at the UN General Assembly, Lam is expected to highlight that peace faces growing challenges as conflicts, strategic competition, declining trust and the erosion of international law intensify. 

Following his New York trip, Lam heads directly to Canada where he’s set to meet with Prime Minister Mark Carney, a visit that comes as relations between the North American nations are strained over a protracted tariff dispute. 

Lam’s visit to the US underscores Vietnam’s efforts to balance relations with its major strategic partners even as it navigates global tensions and ongoing trade uncertainty ahead of this week’s US-China summit between leaders Donald Trump and Xi Jinping. Lam was noncommittal about a potential meeting with Trump during this visit.

Already one of Asia’s fastest-growing economies, Vietnam has made achieving 10 per cent expansion a central goal. But the target has become more difficult after the war in Iran pushed up energy prices and heightened inflation concerns. Still, Lam believes things are on track.

“We have carefully calculated and considered our growth targets,” Lam said, when asked about overheating risks. “We are undertaking institutional reforms and building a new growth model” and are “fully confident we can achieve these goals.” BLOOMBERG