In a last-minute breakthrough, United States and Vietnam have reached a trade agreement that significantly reduces tariffs on Vietnamese exports.
The new deal imposes a 20 percent tariff on many goods exported from Vietnam to the US, a sharp reduction from the 46 percent rate Trump had announced in April. The higher tariff was set to take effect next week.
In a post on his social media platform Truth Social, Trump declared: “It is my great honour to announce that I have just made a trade deal with the Socialist Republic of Vietnam.”
The agreement also includes a 40 percent tariff on goods re-exported through Vietnam from third countries—a move aimed at curbing trans-shipment practices used to bypass tariffs. However, details on how this provision will be enforced remain unclear.
As part of the deal, Vietnam has granted US exporters broader market access, with many American goods—particularly large-engine vehicles—expected to face no tariffs.
Vietnamese President Tô Lâm reportedly urged Trump, in a phone call earlier on Wednesday, to recognise Vietnam as a market economy and lift curbs on high-tech exports to the country—longstanding demands that Washington has so far declined.
Since Trump imposed sweeping tariffs on Chinese goods during his first term, US importers have increasingly turned to Vietnam. Vietnam’s exports to the US have nearly tripled, rising from under $50 billion in 2018 to approximately $137 billion in 2024. In contrast, US exports to Vietnam have grown by just 30 percent, reaching a little over $13 billion in 2024 from less than $10 billion in 2018.
Wednesday’s deal comes amid a wider push by the Trump administration to renegotiate trade terms with over a dozen countries ahead of a July 9 deadline, following a wave of tariff announcements on April 2. While Britain accepted a 10 percent US tariff on autos and other products in exchange for preferential access for its beef and aircraft engines, talks with several other nations, including India, are ongoing.
The agreement with Vietnam, like the UK pact in May, appears to be more of a trade framework than a comprehensive agreement. Neither the White House nor Vietnam’s Ministry of Trade has issued an official statement yet.