The United States and Vietnam have reached a trade agreement that includes a 20% tariff on many of Vietnam’s exports, following last-minute negotiations, according to statements from Donald Trump and Vietnamese state media. This new rate is considerably less than the 46% tariff Trump announced in April, which was set to take effect the following week.
Trump clarified that goods imported from Vietnam typically encounter a 20% tariff, while products transshipped through third countries might be subjected to a 40% levy. Details on how this trans-shipment provision will be implemented remain unclear. Additionally, Vietnam will offer the U.S. greater market access, with American exports to Vietnam facing no tariffs, including large-engine vehicles such as SUVs. Trump expressed optimism about the deal, stating on Truth Social, “It is my Great Honour to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam.” He highlighted the potential for American large-engine vehicles to succeed in Vietnam’s market.
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Vietnam’s president, Tô Lâm, reportedly asked Trump during a phone call to recognise Vietnam as a market economy and to lift restrictions on high-tech exports to Vietnam. These issues have been long-standing requests from Hanoi but have faced rejection from Washington. Since Trump’s tariffs on Chinese goods began during his first term, trade between the U.S. and Vietnam has surged, primarily through Vietnam exporting goods to the U.S. as a workaround for Chinese tariffs.
Vietnamese exports nearly tripled from under $50 billion in 2018 to approximately $137 billion in 2024, according to data from the Census Bureau. U.S. exports to Vietnam experienced an increase of approximately 30% during this period, reaching just over $13 billion in 2023, contrasted with figures below $10 billion in 2018.
