Congress on the last day of session approved permanent normal trade relations status (PNTR) for Vietnam, which was strongly supported by the ag community. Products benefiting will be beef, pork, dairy products, grapes, apples, pears and soybeans. Under the bilateral agreement, tariff rates for about 75% of U.S. ag exports to Vietnam would decline to 15% or less. According to the U.S. Trade Representative, tariffs would be reduced as follows:
- Beef: Tariffs on U.S. beef offals will be reduced from the rate 20% to 15% immediately, and phased down to 8% over four years. Boneless beef will be cut from 20% to 14% over five years. The duty on beef sausages, currently at 50% will drop to 40% immediately and will be reduced to 22% over five years.
- Hides and Skins: Tariffs on hides and skins will be bound at zero immediately. This is currently one of the largest U.S. exports to Vietnam.
- Pork: Tariffs on pork offals will be immediately cut from 20% to 15% with further reductions to 8% over four years. Tariffs on other key pork and pork products will be reduced by 50% over five years, including tariffs on hams and carcasses, which will fall from 30% to 15% in that timeframe. Rates on processed pork products will be reduced from 20% to 10% over five years.
- Grains: Vietnam will bind its applied rate of 5% for both corn and wheat.
- Soybean products: Tariffs on full fat soybean meal and flour will be reduced from 30% to 8% over five years. Tariffs on soybean oil also will be significantly reduced, from 50% to 30% with additional reductions to 20% over five years.