WASHINGTON (Realist English). U.S. President Donald Trump announced a new trade arrangement with Vietnam on Wednesday, confirming that most Vietnamese exports to the United States will face a reduced 20% tariff, down from the previously proposed 46%. Goods trans-shipped through Vietnam from third countries — primarily targeting Chinese-origin products — will be taxed at 40%, while U.S. products entering Vietnam could benefit from a 0% import tariff.
“It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam,” Trump posted on Truth Social, following a phone call with Vietnamese President To Lam. The announcement came just days ahead of a July 9 deadline, after which Trump plans to raise tariffs broadly on most U.S. imports.
The new tariff arrangement marks a significant softening of Trump’s earlier proposal, issued in April, which threatened to impose a sweeping 46% duty on all Vietnamese imports. While details remain vague, the announcement signals a political and diplomatic win for Trump’s trade team, which is scrambling to reach deals with key U.S. partners before the new tariff regime takes effect.
According to the Vietnamese government, the agreement includes Hanoi’s commitment to offer preferential access for U.S. goods, such as large-engine automobiles, though it did not confirm the specific tariff figures cited by Trump.
The deal is expected to soothe tensions with Vietnam — the U.S.’s tenth-largest trading partner and its largest export market in Southeast Asia. Since Trump’s imposition of tariffs on Chinese goods during his first term, Vietnamese exports to the U.S. have nearly tripled, surging from less than $50 billion in 2018 to $137 billion in 2024, according to U.S. Census data. In contrast, U.S. exports to Vietnam rose just 30% over the same period.
Market reaction was swift: shares of major U.S. brands like Nike, Under Armour, and VF Corp (maker of North Face) closed higher on the news, as Vietnam plays a key role in their manufacturing supply chains.
The announcement also includes a new trans-shipment clause, designed to curb the relabeling of Chinese products as “Made in Vietnam” to bypass U.S. tariffs. How this provision will be enforced remains unclear. Analysts say its success depends on how the U.S. defines and applies “transshipping,” a term often viewed as politically malleable.
In parallel, Vietnam reportedly asked Washington to recognize it as a market economy and ease restrictions on the export of high-tech goods — long-standing demands from Hanoi.
The Vietnamese accord follows similar frameworks signed in recent weeks with Britain, which accepted a 10% tariff on vehicles in exchange for concessions on beef and aircraft engines, and China, which restored limited U.S. access to rare earths without settling broader trade disputes.
“This is less a full-fledged trade agreement than a political framework designed to preserve bilateral ties and prevent economic fallout,” said Murray Hiebert, senior associate at the Center for Strategic and International Studies (CSIS). “Vietnam’s leadership feared that the originally proposed 46% tariff would erode its regional competitiveness and strain its deepening security cooperation with Washington.”
The Trump administration has hinted that more deals may follow. More than a dozen countries are negotiating to avoid higher tariffs before next week’s deadline, as Washington seeks to leverage its economic weight ahead of the 2025 election.