On Wednesday, President Donald Trump announced a new trade agreement with Vietnam, which includes a significant 20% tariff on shipments from the Southeast Asian nation to the United States.
The announcement, made via Truth Social, indicated that this deal would allow the U.S. to access Vietnamese markets without tariffs.
Additionally, Vietnam agreed to impose a 40% tariff on goods that are identified as transshipped—those originating from other countries and routed through Vietnam before being sent to the U.S. This method has often been exploited to bypass trade restrictions, with reports of China utilizing Vietnam as a transshipment point.
The revelation of the agreement comes just ahead of the expiration of a 90-day suspension on many of Trump’s reciprocal tariffs, which threatened to increase duties on imports from various countries.
Under the current trade structure, Vietnamese imports faced an overall 46% tariff rate when entering the U.S.
Following the announcement, the S&P 500 index reacted positively, although apparel manufacturers that depend heavily on Vietnam for production may encounter increased costs due to the tariff adjustments.
In Trump’s detailed post, he stated:
“It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam after speaking with To Lam, the Highly Respected General Secretary of the Communist Party of Vietnam. It will be a Great Deal of Cooperation between our two Countries. The Terms are that Vietnam will pay the United States a 20% Tariff on any and all goods sent into our Territory, and a 40% Tariff on any Transshipping. In return, Vietnam will do something that they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade. In other words, they will ‘OPEN THEIR MARKET TO THE UNITED STATES,’ meaning that we will be able to sell our product into Vietnam at ZERO Tariff. It is my opinion that the SUV or, as it is sometimes referred to, Large Engine Vehicle, which does so well in the United States, will be a wonderful addition to the various product lines within Vietnam. Dealing with General Secretary To Lam, which I did personally, was an absolute pleasure. Thank you for your attention to this matter!”
Trump has hinted that he might reconsider the forthcoming deadline for the reciprocal tariffs, which could result in a rise in rates. The 90-day pause, which had reduced tariffs for almost all other nations to a flat 10% rate, was initially established in early April to facilitate ongoing negotiations with various countries.
As the deadline nears, the Trump administration has only finalized adjusted trade agreements with China and the United Kingdom, despite claims of nearing deals with multiple other nations.
Vietnam, where exports to the U.S. reportedly accounted for 30% of its gross domestic product last year, finds itself particularly at risk under the potential impact of Trump’s tariff policies.
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