The US will place a lower-than-promised 20 p.c tariff on many Vietnamese exports, President Donald Trump has stated, cooling tensions with its Tenth-biggest buying and selling companion days earlier than he might elevate levies on most imports.
Vietnamese items will now face a 20 p.c tariff, and any transshipments from third international locations by Vietnam will face a 40 p.c levy, Trump stated, asserting the commerce deal on Wednesday. Vietnam would settle for US merchandise with a zero p.c tariff, he added.
“It’s my Nice Honor to announce that I’ve simply made a Commerce Take care of the Socialist Republic of Vietnam,” Trump stated on Fact Social after talking with Vietnam’s high chief, To Lam.
Trump’s announcement comes simply days earlier than a July 9 deadline he set to resolve negotiations earlier than he ramps up tariffs on most imports, one of many Republican’s signature financial insurance policies.
Below that plan introduced in April, US importers of Vietnamese items would have needed to pay a 46 p.c tariff.
The Vietnamese authorities stated in a press release that the 2 international locations agreed on a joint assertion a couple of commerce framework. It didn’t verify the precise tariff ranges talked about by Trump.
Vietnam would decide to “offering preferential market entry for US items, together with large-engine automobiles”, the federal government in Hanoi stated.
A deal between the 2 international locations can be a political increase for Trump, whose group has struggled to shortly shut offers with Washington’s greatest buying and selling companions forward of the deadline.
Whereas the administration has teased a forthcoming cope with India, truces reached earlier with the United Kingdom and China had been restricted in scope. Talks with Japan, the sixth-largest buying and selling companion for the US and closest ally in Asia, appeared deadlocked.
“Vietnam has been very eager to get out from beneath this,’’ stated Mary Pretty, senior fellow on the Peterson Institute for Worldwide Economics. “That is forcing a smaller nation to eat it, mainly. We will do this. It’s the large international locations that everyone’s maintaining their eyes on.’’
She stated she doubts that Trump will be capable to impose such a lopsided settlement on massive buying and selling companions such because the European Union and Japan.
The US is Vietnam’s largest export market, and the 2 international locations’ rising financial, diplomatic and army ties are a hedge in opposition to Washington’s greatest strategic rival, China. Vietnam has labored to retain shut relations with each superpowers.
Shares of main US attire and sportswear makers, together with Nike, Below Armour and North Face maker VF Corp, rose on the information.
Lam additionally requested Trump for the US to recognise Vietnam as a market financial system and take away restrictions on the exports of high-tech merchandise to the nation, Vietnam stated. These modifications have lengthy been sought by Hanoi and dismissed by Washington.
The White Home and the Vietnamese Ministry of Trade and Commerce didn’t reply to requests for extra remark.
Rising commerce ties
Since Trump imposed tariffs on a whole bunch of billions of {dollars} in Chinese language items in his 2017-2021 time period, US commerce with Vietnam has exploded.
Since 2018, Vietnam’s exports have gone up almost threefold, from lower than $50bn that yr to about $137bn in 2024, Census Bureau knowledge exhibits. US exports to Vietnam are up solely about 30 p.c in that point – to only over $13bn final yr from lower than $10bn in 2018.
Washington complains that Chinese language items have been dodging greater US tariffs by transiting by Vietnam.
William Reinsch, a former US commerce official now with the Middle for Strategic and Worldwide Research, stated the importance of the transshipment crackdown will rely on “how the time period is outlined and enforced. Some transshipment is outright fraud – merely altering the label; some is a authentic substantial transformation in Vietnam into a brand new product; and there’s a lot in between. Enforcement is all the time difficult”.
Particulars had been scarce, and it was not instantly clear how any transshipment provision aimed toward merchandise largely made in China after which completed in Vietnam can be applied.
Trump introduced a wave of tariffs for international locations all over the world on April 2, earlier than pausing the implementation of most duties till July 9. Greater than a dozen international locations are actively negotiating with the Trump administration to keep away from a steep spike in tariffs on their exports.
The UK accepted a ten p.c US tariff on many items, together with autos, in alternate for particular entry for plane engines and British beef.
Just like the settlement struck with the UK in Could, the one with Vietnam resembles extra a framework than a finalised commerce pact.
China and the US additionally got here to a truce in a tit-for-tat tariff battle through which Beijing restored American entry to some uncommon earth minerals, however the two sides left most of their disagreements to later negotiations.
