President Donald Trump announced, on Wednesday, July 2, that he had struck a trade deal with Vietnam, under which the country would face a minimum 20% tariff and open its market to US products. The deal comes less than a week before Trump's self-imposed July 9 deadline for steeper tariffs on US trade partners to take effect, if bilateral agreements are not reached. If confirmed, the terms of the agreement will significantly increase the price of goods that Vietnam exports to the United States, but Hanoi escapes the threat of the more severe 46% tariff rate threatened by Trump in April.
"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," Trump wrote, on his Truth Social platform. He said that under the "Great Deal of Cooperation," imports of Vietnamese goods will face a 20% US tariff, while goods that pass through Vietnam to circumvent steeper trade barriers – so-called "transshipping" – will see a 40% tariff.
Shares in clothing companies and sports equipment manufacturers – which have a large footprint in Vietnam – rose as the news was announced, but later declined sharply after the president released details, including the continued tariffs, which were higher than expected.
Trump said that "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," he said. "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." The president said he believed US-made SUVs, "which do so well in the United States, will be a wonderful addition to the various product lines within Vietnam."
Trump's trade advisor, Peter Navarro, has called Vietnam a "colony of China," saying that one-third of Vietnamese products were, in fact, relabelled Chinese goods.
In a government statement, Vietnam confirmed that negotiating teams had come to an agreement to address the reciprocal tariff issue, but did not detail any tariff terms. Trump "affirmed that the US will significantly reduce reciprocal taxes for many Vietnamese export goods and will continue to cooperate with Vietnam in resolving difficulties affecting bilateral trade relations, especially in areas prioritized by both sides," the statement said.
Trump's announcement comes a week before the threatened US reimposition of steep tariffs on dozens of economies, including the European Union and Japan, many of which are still scrambling to reach deals that would protect them from the measures. Since April, Washington had so far only announced a pact with Britain and a deal to temporarily lower retaliatory tariffs with China. Both involve the US maintaining some of Trump's tariffs on the trading partners.