Vietnam Reduces MFN Tariff Rates on Strategic Imports: Decree 73

Vietnam reduces Most Favored Nation (MFN) tariff rates on key imports under Decree 73/2025/ND-CP (“Decree 73”) to enhance trade relations and supply chain access.

On March 31, 2025, the Government of Vietnam issued Decree 73 (amending the Preferential Import Tariff Schedule under Decree No. 26/2023/ND-CP. The new decree lowers MFN tariff rates for a range of essential goods. The move follows Prime Minister’s Directive No. 06/CT-TTg, dated March 10, 2025, which called on the Ministry of Finance (MoF) to urgently revise Vietnam’s MFN tax policy in response to global trade shifts and supply chain demands.

The MFN duty cuts cover automobiles, agricultural commodities, energy resources, and industrial inputs. These changes take effect from the date of issuance, supporting Vietnam’s goals to balance import flows, strengthen relationships with Comprehensive Strategic Partners (CSPs), and enhance domestic supply capacity.

Background: Why MFN tariff reductions now?

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According to the MoF’s Department of Tax Policy Management, the revisions aim to support economic growth and enhance Vietnam’s trade competitiveness. Director Nguyen Quoc Hung emphasized that the targeted reductions help align Vietnam’s tariff structure with international standards while maintaining fairness between FTA and non-FTA trading partners.

Vietnam’s CSP network includes twelve countries such as the United States, China, South Korea, Japan, India, Australia, and several ASEAN members. Notably, Vietnam does not have a Free Trade Agreement (FTA) with the US. As a result, American exports to Vietnam face MFN tariffs, putting them at a competitive disadvantage compared to FTA-covered goods. The reduction in MFN rates helps mitigate this imbalance.

Also read: The Impact of Tariffs on Vietnamese Exports: US-Vietnam Trade Relations Under Trump 2.0

Key tariff reductions under Decree 73

Decree 73 introduces updated MFN duty rates for a wide range of imported commodities, spanning automotive, energy, agriculture, and industrial sectors. The adjustments are aimed at improving trade conditions for essential goods and inputs not sufficiently produced in the domestic market. These rates apply uniformly to World Trade Organization (WTO) member countries and are aligned with Vietnam’s broader trade and supply chain strategy.

Legal and policy rationale

The MoF clarified that all adjustments in Decree 73 are in accordance with the Law on Export and Import Duties. The changes were designed to simplify the tariff schedule, avoid classification conflicts, and ensure that no new tax categories are introduced.

In addition, Vietnam maintains a formal Final List of MFN Exemptions, which outlines certain sectoral exceptions to the MFN principle under Article II of the GATT framework. These exemptions are typically governed by bilateral agreements and include:

• Air Transport Services: Subject to country-specific treatment under bilateral air services agreements. The policy applies to all countries with whom Vietnam has such agreements, including Australia, Japan, France, the UK, and others. The exemption is indefinite and based on reciprocal commitments;
• International Maritime Transport of Cargoes: Cargo-sharing arrangements between Vietnam and Thailand governed by a 10-year bilateral commercial maritime navigation agreement; and
• Maritime Transport Services: Inland trucking, warehousing, and container freight station services between Vietnam and Singapore, with commitments established via a bilateral shipping agreement also spanning 10 years.

These exemptions clarify that while MFN rates generally apply uniformly, Vietnam preserves the right to adopt differentiated treatment in certain service sectors for strategic and operational reasons. These are maintained on a reciprocal and limited-duration basis, reinforcing Vietnam’s flexible trade alignment strategy.

Strategic trade implications of the MFN tariff revisions

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The MFN revisions signal a broader shift in Vietnam’s trade policy strategy. By offering duty reductions for high-demand imports, the country supports lower input costs for domestic industries and enhances bilateral ties with key partners like the US. This may also reduce price pressures on consumers and support macroeconomic stability.

The tariff realignment is part of Vietnam’s response to shifting global dynamics, including supply chain realignments, competitive sourcing, and regulatory reforms in major trade economies. The adjustments are also intended to complement Vietnam’s ongoing efforts to attract FDI in sectors such as food processing, automobile manufacturing, and renewable energy.

Also read: Opportunities Amid Tariff Risks: Vietnam Aims for Trade Balance with the US

In brief

Vietnam’s adoption of Decree 73 reflects a strategic recalibration of MFN import duties, balancing economic need with geopolitical relationships. The tax rate reductions are expected to improve trade flows, enhance industrial competitiveness, and align tariff policy with the realities of global supply chains.

As these rates take effect from March 31, 2025, importers and investors are advised to review their sourcing strategies, customs classifications, and compliance frameworks to take full advantage of the revised tariff landscape.

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