President Trump recently announced a new trade deal with Vietnam, aiming to reshape tariffs as part of his broader strategy to renegotiate trade agreements with multiple countries. This announcement came just a week before his self-imposed deadline for these negotiations.
In a post on social media, Trump revealed that tariffs on goods imported from Vietnam will be set at 20%, while goods shipped through Vietnam will face a 40% tariff. He incorrectly stated that Vietnam would bear these costs, but in reality, it will be U.S. businesses importing goods from Vietnam that will pay these tariffs.
In exchange for the tariffs, Trump claimed that Vietnam would allow the U.S. "TOTAL ACCESS" to its markets, eliminating tariffs on American exports, particularly highlighting SUVs as a key product for increased sales in Vietnam. However, the White House has not provided further details about this agreement.
This announcement follows Trump’s earlier proposal in April for a steep 46% tariff on Vietnamese imports, one of the highest rates proposed for any country. He later temporarily lowered this to 10% while negotiations continued between U.S. and Vietnamese officials.
Trade relations between the U.S. and Vietnam have significantly improved since the U.S. lifted its economic embargo on Vietnam in 1994 and normalized diplomatic ties in 1995. A bilateral trade agreement signed in 2001 granted Vietnam most-favored-nation status, facilitating its entry into the World Trade Organization.
Over the past two decades, trade between the two nations has surged, reaching $149.6 billion by 2024, a remarkable increase since 2002. In 2023, the U.S. and Vietnam upgraded their relationship to a "comprehensive strategic partnership," which has been vital for Vietnam’s economic development. The U.S. is now Vietnam’s largest export market, accounting for nearly a third of its total exports, with key exports including machinery, appliances, clothing, and shoes.
Despite this growth, concerns about the trade imbalance favoring Vietnam have emerged in Washington. The U.S. trade deficit with Vietnam reached over $123.5 billion in 2024. U.S. officials are urging Vietnam to address various trade barriers, combat fraud, and improve market access for American goods and services.
Vietnam has set an ambitious growth target of 8% for 2025. However, a recent report from the Asian Development Bank indicated that U.S. tariffs of 20% or higher could pose challenges to achieving this goal.