Hanoi calls for VAT cuts and credit support amid US tariffs
Hanoi’s export-driven economy faces new challenges as the US, one of its top trading partners, considers imposing steep tariffs on Vietnamese goods.
THE HANOI TIMES — Hanoi urged a value-added tax cut and better credit access to support exporters amid looming US tariffs on Vietnamese goods.
The proposals were presented by the city's Department of Industry and Trade at a conference held in Hanoi on April 11, which focused on identifying strategies to support local businesses amid increasing trade pressures.
A garment factory in Dong Anh District, Hanoi. Photo: Chien Cong/The Hanoi Times
The Department of Industry and Trade urged ministries to provide timely information to businesses and continue administrative reforms to reduce costs and help companies seize new trade opportunities.
It also called for close monitoring of market developments, support for businesses to upgrade technology and boost competitiveness, and more trade promotion to diversify export markets.
Hanoi will help businesses find new customers and expand direct exports to foreign markets, the department said.
The department warned that the new US tariff policy could undermine Vietnam’s and Hanoi’s position as attractive destinations for foreign investment, especially in key export sectors such as electronics and machinery.
Speaking at the conference, Vo Nguyen Phong, Director of Hanoi's Department of Industry and Trade, said that if the US imposes a 46% reciprocal duty on Vietnamese exports, the city's export turnover could fall by 5%-7%, while GRDP growth could drop by 0.3%-0.5% in 2025.
Major export industries such as electronics, machinery, textiles, footwear, and wood products, which account for nearly 70% of Hanoi's total exports to the US, would suffer the most, he added.
"This situation seriously challenges Hanoi's export growth target of more than 7% and GDRP expansion of more than 8%," said Phong.
Electronics manufacturing at MBT Electrical Equipment Company. Photo: Hoai Nam/The Hanoi Times
According to the department, the US has ranked among Hanoi’s largest export markets over the past five years, accounting for 17%-21.4% of the city’s total export value. Exports to the US grew at an average annual rate of 6.4%, higher than the citywide average of 4%.
In the first quarter of 2025, Hanoi’s exports to the US reached US$787 million, making up 18.2% of the city’s total exports, up 112.3% year-on-year.
In terms of sectors, in 2024, textiles accounted for 28%, machinery and equipment 27.5%, footwear 3.4%, electric wires and cables 3.8%, and electronics 2.6%.
Last year, Hanoi brought in goods worth $1.3 billion from the US, accounting for 3.2% of the city's total imports.
In 2024, Hanoi's import and export reached $60.1 billion, up 11% year-on-year, and maintained a positive trend in the first three months of this year, with export turnover estimated at $4.32 billion, up 2.6% year-on-year.
According to the city's plan, Hanoi targets a 5% increase in exports for 2025, a rise of 9% in retail sales and service revenues, and the consumer price index kept below 4.5%.
