HANOI, Vietnam — In a significant development on international trade, President Donald Trump announced Wednesday that the United States will impose a 20% tariff on imports from Vietnam, part of a newly negotiated trade agreement meant to address previous trade disparities. The tariff replaces an impending 46% levy that was set to come into effect next week, originally part of Trump’s earlier initiatives announced in April.
The agreement signals a shift in trade dynamics as the U.S. continues to seek equitable terms with various trading partners. Other nations, including members of the European Union and Japan, are now racing against the clock to secure their own arrangements before facing the planned tariff increases.
Under the new terms, Vietnam will allow U.S. products to enter the country without incurring tariffs. These import taxes typically fall on the purchaser, often leading to increased costs for consumers if companies choose to pass on the expenses rather than absorbing them. The deal has raised apprehensions among U.S. trading counterparts, who fear diminished demand for their exported goods due to these tariffs.
In a move to combat potential trade manipulation, the U.S. will also enforce a steep 40% tariff on goods suspected of “trans-shipping” through Vietnam—an issue identified by Trump’s senior trade advisor, Peter Navarro. He noted that a significant portion of Vietnamese exports to the U.S. may actually originate from China, routed through Vietnam to evade tariffs.
Trump hailed the agreement as a “Great Deal of Cooperation,” emphasizing Vietnam’s commitment to granting the U.S. “TOTAL ACCESS” to its markets. This promise could pave the way for American products to enter Vietnam free of tariffs, potentially boosting U.S. companies looking to expand their presence in Southeast Asia.
Vietnam has emerged as a pivotal manufacturing hub for major global brands, including Nike and Apple, particularly as companies relocate from China in response to earlier tariffs instituted by the Trump administration. The initial market response to Wednesday’s announcement reflected optimism, with stocks for companies operating in Vietnam rising, though gains were moderated as details about the 20% tariff became available.
Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, expressed confidence in Vietnam’s trade future, asserting that businesses exporting to the U.S. will continue their operations. Nonetheless, he raised concerns regarding the trans-shipping tariff, labeling the definition as “vague and politicized,” which may complicate compliance and enforcement.
In a related diplomatic gesture, Vietnam’s General Secretary To Lam reached out to Trump via phone, extending an invitation for a presidential visit to the country. Recently, there have been announcements of development projects by the Trump family in Vietnam, including a $1.5 billion investment for luxury hotels and golf courses, indicating growing ties between the two nations.
Since Trump instituted broad tariffs globally in April, citing a perceived lack of “reciprocity,” many nations have since approached the U.S. to negotiate more favorable trade terms. Current agreements include a deal with Britain and a temporary reduction in retaliatory duties with China, showcasing the evolving landscape of international trade under the Trump administration.