Former U.S. President Donald Trump announced on Wednesday that many Vietnamese exports to the United States will face a reduced 20% tariff, down from the previously proposed 46%, easing trade tensions with Washington’s tenth-largest trading partner just days before a planned expansion of tariffs on global imports.
According to Trump, trans-shipments from third countries through Vietnam—an issue often linked to rerouted Chinese goods—will face a 40% levy, while Vietnam will be able to import U.S. goods at a zero percent tariff.
“It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam,” Trump said on Truth Social after speaking with Vietnam’s President, To Lam.
The announcement comes ahead of a July 9 deadline, when Trump is expected to impose broader tariffs on imports from several countries, a signature element of his economic platform. The initial plan, unveiled in April, included a 46% tariff on Vietnamese goods, prompting concerns from Vietnamese exporters and U.S. importers alike.
However, details remain unclear. It has not been specified which Vietnamese goods the 20% tariff would apply to, or whether some will fall under different rates. Additionally, the enforcement and scope of the trans-shipment provision—intended to curb goods from China falsely labeled as “Made in Vietnam”—has yet to be fully defined.
The Vietnamese government did not confirm the specific tariff rates but released a statement celebrating what it described as a joint framework agreement. Hanoi emphasized its commitment to providing preferential access for U.S. products, including large-engine vehicles, and requested that Washington recognize Vietnam as a market economy and ease restrictions on high-tech exports—longstanding goals for Vietnamese policymakers.
For Trump, the deal marks a modest diplomatic and political win as his administration seeks to secure quick bilateral arrangements before the upcoming tariff deadline. Similar framework agreements with Britain and China have already been reached, though they have been limited in scope, and talks with Japan—a key U.S. ally and major trading partner—have reportedly stalled.
The U.S. is Vietnam’s largest export market, and bilateral ties have strengthened across economic, military, and diplomatic fronts—often as a counterbalance to China’s growing influence in the region. Vietnam has carefully maintained close relations with both powers.
Trump’s tariff announcement boosted U.S. markets. Shares of leading apparel and sportswear companies—including Nike, Under Armour, and VF Corp (maker of The North Face)—closed higher on Wednesday in response to the news.
Vietnam’s trade boom has been significant in recent years. After Trump imposed sweeping tariffs on China in his first term, U.S. importers increasingly turned to Vietnam. According to U.S. Census Bureau data, Vietnamese exports to the U.S. tripled from under $50 billion in 2018 to around $137 billion in 2024. In contrast, U.S. exports to Vietnam grew only 30% over the same period, reaching just over $13 billion in 2024.
However, the issue of trans-shipping remains contentious.
“‘Transshipping’ is a vague and often politicized term in trade enforcement,” said Dan Martin, a business adviser at Dezan Shira & Associates. “How it’s defined and how it’s applied in practice will shape the future of U.S.-Vietnam trade relations.”
The April 2 tariff wave introduced by Trump has left more than a dozen countries scrambling to negotiate exemptions before July 9. For example, Britain agreed to a 10% U.S. tariff on many goods, including automobiles, in return for special access for aircraft engines and British beef.
Like the UK deal, the Vietnam agreement appears to be a framework rather than a finalized trade pact. The China-U.S. truce, which restored U.S. access to certain rare-earth minerals, also left many trade disputes unresolved.
“Had Trump stuck with the 46% tariff—much higher than current China duties—Vietnam feared it would lose competitiveness, especially within Southeast Asia,” said Murray Hiebert, senior associate at the Southeast Asia Program of the Center for Strategic and International Studies (CSIS). “This likely would have dented Vietnam’s trust in the U.S. and it might have toned down some of its security cooperation with Washington.”
The Vietnamese government and the White House have yet to provide additional official statements on the deal.
