On January 21, at the 2025 World Economic Forum (WEF) Davos Conference, Vietnamese Prime Minister Pham Minh Chinh attended and said, “If playing golf brings benefits to the nation, the people, and the people, I am ready.” The Vietnamese Prime Minister wants to play with Trump for the sake of national affairs.
Chinh’s statement seems to be “clever” in diplomacy. Because Vietnam has a trade surplus with the US of up to $104.4 billion in 2024 (Exporting goods worth $119.5 billion to the US and importing only $15.1 billion). However, the PM’s “bamboo” diplomatic strategy has failed.
Recently, US President Donald Trump has dealt a heavy blow to the Vietnamese economy with a tax rate of 46%, higher than the tax rate for China.
It is worth mentioning that Trump said “They like me and I like them. But the problem is that they impose 90% tax on our goods.” Thanks to this very “clever” way of imposing taxes, Vietnam only lost $15.1 billion importing American goods while Vietnam extracted $119.5 billion from the US market.
American goods are high-end goods, most of which do not have to compete with similar goods from Vietnam. Moreover, the Vietnamese people’s economy is still poor, their consumption of American goods is limited and they cannot spend lavishly. Therefore, without imposing too high a tax on American goods, Vietnamese people cannot use American goods much. The heavy tax on American goods makes Vietnamese people have to spend more money to buy American goods, while the extra money goes into the communist officials’ pocket.
Perhaps for many years the US side has known very well about this cunning trick of the Communist Party of Vietnam but only now has they taken action. It is unclear if this is a lesson for Vietnamese leaders who have no long-term vision.
Smart diplomacy is a form of diplomacy that gives and takes. Vietnam has participated in the global playground since 2006, when Vietnam joined the World Trade Organization (WTO) but it seems that the Communist Party does not want to participate as a decent member.
If the leader has a vision, he will not use a cunning tax policy like Vietnam to extract dollars from the US. How can this be sustainable? To be sustainable, he must build a good legal infrastructure, create conditions for strong domestic private enterprises to go abroad to participate in the global playground. That is the long-term and sustainable plan. However, the Communist Government does not do that, they focus on forms of law evasion, taking advantage of the generosity of big countries to make profits.
In fact, Vietnam needs to self-regulate its domestic business environment to be fair and in line with the market economy standards set by the US and EU. Only when the US and EU recognize it, will Vietnamese businesses have the opportunity to protect themselves when the US or EU imposes anti-dumping taxes and other unreasonable taxes.
It is unclear how many generations of General Secretaries and Prime Ministers Vietnam has gone through, but they have only failed to implement the market economy standards. Some comments say that the Communist Party deliberately does not want to change, not that they are incapable of change. They deliberately maintain the so-called “Socialist-oriented market economy” to maintain injustice, they want to maintain advantages for state-owned enterprises and crony enterprises, and they do not care about genuine enterprises.
This time the US imposed a 46% tax, it is a very strong blow, Vietnamese exporters will be stunned, and certainly, many export enterprises will lose. The Vietnamese economy will be miserable.
Going into the global arena, cunning tricks like bamboo diplomacy cannot be called clever. That is cunning, not clever.
Thai Ha-Thoibao.de
