Digital Trade Liberalization Under Low Tariff Regimes: Heterogeneous Effects of Information and Communication Technologies in Vietnam

This paper examines how the composition of digital trade liberalization shapes trade adjustment patterns in a low-tariff environment. While digital technologies are often treated as a unified category, different components may generate distinct economic effects and policy implications. Using Vietnam as a case study, the analysis distinguishes between information technologies (ITs), which are embedded in production processes, and communication technologies (CTs), which primarily reduce coordination costs. A partial equilibrium simulation is conducted using the WITS-SMART model based on 2023 trade and tariff data. The results show that tariff elimination in IT products leads to a substantially stronger import response and a larger reduction in tariff revenue compared to CT. However, the overall magnitude of these effects remains modest, reflecting Vietnam’s already low tariff structure. The findings highlight the importance of accounting for heterogeneity within digital technologies when assessing trade liberalization in emerging economies.