“WASHINGTON -- The U.S. and Vietnam have struck a tariff deal that will see American goods enter the country duty-free, President Trump announced Wednesday.
In return, the U.S. will charge 20% tariffs on Vietnamese goods, Trump said, instead of the 46% tariffs he had announced in April, before putting the duties on pause to allow for negotiations. "It will be a Great Deal of Cooperation between our two Countries," Trump said in a Truth Social post.
Additionally, goods from other countries that pass through Vietnam on their way to the U.S. will be charged a higher 40% tariff, Trump announced. The U.S. had made addressing so-called transshipment of goods -- particularly those originating from China -- a priority in its negotiations with Vietnam.
The agreement marks the second trade pact Trump has struck under the threat of his so-called reciprocal tariffs, which were imposed on nearly all U.S. trading partners in early April, before being put on pause for 90 days. The U.S. previously struck a deal with the United Kingdom to lower some of its tariffs.
The Vietnamese Embassy in Washington didn't respond to requests for comment. Vietnamese state media said Wednesday that the government had asked Trump to recognize it as a market economy and lift export restrictions on high-tech goods. Market-economy status means Vietnam could face lower product-specific tariffs on a litany of goods shipped to the U.S., though it would still be subject to Trump's economywide duties.
Vietnam is the U.S.'s eighth largest trading partner, with nearly $150 billion in two-way trade in goods in 2024. But it accounts for the U.S.'s third-largest trade deficit -- more than $123 billion last year.
Both of those numbers have grown significantly in recent years as many global corporations, particularly apparel and footwear companies, turned to Vietnam as an alternative to China, which Trump and former President Joe Biden both hit with tariffs and sanctions over forced labor practices.
That growing trade imbalance has vexed the Trump team. One of the first Trump administration's final economic acts was to formally label Vietnam a currency manipulator, accusing it of undervaluing the Vietnamese dong to make the country's exports more competitive on the global stage.
Trump appears eager to combat the trade deficit through exporting more American goods to Vietnam, in addition to placing tariffs on its products. In his Truth Social post, Trump said that Vietnam would open their market to the U.S. and predicted that American SUVs would be "a wonderful addition to the various product lines within Vietnam."
The demand for relatively high-price American SUVs remains to be seen. About 9% of Vietnamese households own cars, a government survey showed earlier this year.
U.S. agriculture may be the bigger winner. Last month, Vietnamese firms signed memorandums of understanding to buy $2 billion worth of U.S. farm products as part of trade talks with the Trump administration, and the Vietnamese government approved imports of U.S. peaches and nectarines into the country.” [1]
1. Trump Says U.S., Vietnam Reach Agreement on Tariffs. Bade, Gavin. Wall Street Journal, Eastern edition; New York, N.Y.. 03 July 2025: A2.
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