What is a Reciprocal Tariff? Positive and Negative Impacts of Reciprocal Tariffs

Reciprocal Tariffs Explained Simply

Reciprocal tariffs are understood as reciprocal tariffs, meaning that a country applies an import tax corresponding to the tax rate that the exporting country imposes on its goods.

For example, if the US imposes a 10% tariff on goods from Vietnam, Vietnam can impose a 10% tariff on goods from the US to ensure fairness in trade.

Mr. Trump announced new taxes. Photo: CNBC

The term has appeared frequently in the context of international trade policy, especially since February 13, 2025, when Trump signed an executive order requiring the development of a reciprocal tariff plan to “ensure fair trade.” The goal is to reduce the US trade deficit and protect American workers, but it has also raised concerns about disruptions to global trade.

Impact of Reciprocal Tariffs on the Market

Reciprocal tariffs could have far-reaching effects on the market, based on recent economic analysis:

Reciprocal tariffs, such as 25% tariffs on Canada and Mexico, could reduce long-term US GDP by 0.2%, 223,000 full-time jobs, and reduce average after-tax income by 0.6%, not to mention retaliation from other countries. This suggests a risk of reduced global trade, especially if countries like China and the EU retaliate.

Reciprocal tariffs, as high as 54% on China, would raise the price of imported goods, hurting US consumers and businesses that rely on global supply chains. S&P Global Ratings estimates US consumer prices could rise 0.7% if the tariffs are fully implemented.

Logistics industries like shipping are worried about reduced demand for shipping due to the trade war. Companies like Maersk and MSC could face higher costs due to supply chain disruptions.

Reciprocal tariffs could trigger a US recession and slow global growth, reminiscent of the 1930 Smoot-Hawley Act that led to the Great Depression.

Specific Impact of Reciprocal Tariffs on Vietnam

Vietnam, as one of the US's major trading partners, will be affected by the reciprocal tax policy:

Vietnam exports many products to the US, such as textiles, footwear, and electronics. If the US imposes high tariffs, the prices of Vietnamese goods will increase, reducing their competitiveness.

Mr. Do Ngoc Hung, Vietnam Trade Office in the US, said this policy not only targets tariffs but also non-tariff barriers, making negotiations difficult.

During the meeting with US Ambassador Marc E. Knapper, Minister Nguyen Hong Dien emphasized the complementarity of the two economies, and the US Ambassador affirmed that the recent tax measures were not aimed at Vietnam, in order to maintain positive relations.

Ms. Tran Thi Khanh Hien, Research Director of MB Securities, said that Vietnam will be affected, but Trump may prioritize major partners first, and cooperative countries like Japan are under less pressure than in the previous term.

Positive and negative impacts of reciprocal tariffs

Element	Positive Impact	Negative Impact
Commodity Price	Protect domestic industry from low-cost competition	Increasing import prices affects consumers
Global Trade	Encourage negotiation of tax reductions	Declining trade volume, risk of trade war
Industry	Domestic manufacturing industry is supported	Raw material export and import industry affected
Economic Growth	Protecting jobs in the short term	Reduced long-term growth due to higher costs
Vietnam Specific	Maintain positive trade relations	Exports to US may fall, non-tariff barriers

Reciprocal tariffs, or tariffs that give or take back, are a trade tool to ensure fairness, but they present both opportunities and challenges. For Vietnam, the impact is inevitable, especially in exports, but diplomatic and negotiation efforts can minimize the negative impact. Consumers and businesses need to closely monitor new policies, especially from the US, to adjust their business strategies.

Source: https://baonghean.vn/thue-quan-doi-ung-la-gi-tac-dong-timch-cuc-va-tieu-cuc-cua-thue-doi-ung-10294327.html