Trump announces deal to impose 20% tariff on trade with Vietnam
Vietnamese goods will now face a 20 percent tariff, and any transshipments from third countries through Vietnam will face a 40 percent levy, Trump said, announcing the trade deal on Wednesday. Vietnam would accept US products with a zero percent tariff, he added.
'It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam,' Trump said on Truth Social after speaking with Vietnam's top leader, To Lam.
Trump's announcement comes just days before a July 9 deadline he set to resolve negotiations before he ramps up tariffs on most imports, one of the Republican's signature economic policies.
Under that plan announced in April, US importers of Vietnamese goods would have had to pay a 46 percent tariff.
The Vietnamese government said in a statement that the two countries agreed on a joint statement about a trade framework. It did not confirm the specific tariff levels mentioned by Trump.
Vietnam would commit to 'providing preferential market access for US goods, including large-engine cars', the government in Hanoi said.
A deal between the two countries would be a political boost for Trump, whose team has struggled to quickly close deals with Washington's biggest trading partners ahead of the deadline.
While the administration has teased a forthcoming deal with India, truces reached earlier with the United Kingdom and China were limited in scope. Talks with Japan, the sixth-largest trading partner for the US and closest ally in Asia, appeared deadlocked.
'Vietnam has been very keen to get out from under this,'' said Mary Lovely, senior fellow at the Peterson Institute for International Economics. 'This is forcing a smaller country to eat it, basically. We can do that. It's the big countries that everybody's keeping their eyes on.''
She said she doubts that Trump will be able to impose such a lopsided agreement on big trading partners such as the European Union and Japan.
The US is Vietnam's largest export market, and the two countries' growing economic, diplomatic and military ties are a hedge against Washington's biggest strategic rival, China. Vietnam has worked to retain close relations with both superpowers.
Shares of major US apparel and sportswear makers, including Nike, Under Armour and North Face maker VF Corp, rose on the news.
Lam also asked Trump for the US to recognise Vietnam as a market economy and remove restrictions on the exports of high-tech products to the country, Vietnam said. Those changes have long been sought by Hanoi and dismissed by Washington.
The White House and the Vietnamese Ministry of Industry and Trade did not respond to requests for additional comment.
Growing trade ties
Since Trump imposed tariffs on hundreds of billions of dollars in Chinese goods in his 2017-2021 term, US trade with Vietnam has exploded.
Since 2018, Vietnam's exports have gone up nearly threefold, from less than $50bn that year to about $137bn in 2024, Census Bureau data shows. US exports to Vietnam are up only about 30 percent in that time – to just over $13bn last year from less than $10bn in 2018.
Washington complains that Chinese goods have been dodging higher US tariffs by transiting through Vietnam.
William Reinsch, a former US trade official now with the Center for Strategic and International Studies, said the significance of the transshipment crackdown will depend on 'how the term is defined and enforced. Some transshipment is outright fraud – simply changing the label; some is a legitimate substantial transformation in Vietnam into a new product; and there is a lot in between. Enforcement is always complicated'.
Details were scarce, and it was not immediately clear how any transshipment provision aimed at products largely made in China and then finished in Vietnam would be implemented.
Trump announced a wave of tariffs for countries around the world on April 2, before pausing the implementation of most duties until July 9. More than a dozen countries are actively negotiating with the Trump administration to avoid a steep spike in tariffs on their exports.
The UK accepted a 10 percent US tariff on many goods, including autos, in exchange for special access for aircraft engines and British beef.
Like the agreement struck with the UK in May, the one with Vietnam resembles more a framework than a finalised trade pact.
China and the US also came to a truce in a tit-for-tat tariff battle in which Beijing restored American access to some rare earth minerals, but the two sides left most of their disagreements to later negotiations.
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