President Trump Announces 20% Tariff on Vietnam's Exports, Easing Trade Tensions

President Trump announced a 20% tariff on Vietnamese exports and a 40% tariff on transit goods, easing trade tensions and reshaping economic relations between the two countries.

New York Port (Ảnh: Port of New York & New Jersey)

US President Donald Trump on Wednesday announced a 20% tariff on many Vietnamese exports, a lower rate than announced in early April. The move comes just days before the US president is expected to raise tariffs on most imports, signaling an easing of tensions with the US's tenth-largest trading partner.

Vietnamese goods will be subject to a 20% tariff, while shipments transiting from third countries through Vietnam will be subject to a 40% tariff, Trump said. In return, Vietnam can import US products at a 0% tariff.

President Trump's announcement comes just days before a July 9 deadline when he is expected to raise tariffs on most imports — one of his prominent economic policies. Under the plan, announced in April, US importers of Vietnamese goods would have had to pay tariffs of up to 46%.

Details Limited, Transshipment Complex

However, details of the deal have not been released. It is not yet clear which products Trump's 20% tariffs would apply to, or whether some items would qualify for a lower or higher total tariff.

There is also much to discuss later on how to implement and enforce the new transshipment rule — a provision aimed at products that are primarily made in China and then labeled "Made in Vietnam."

Boosting Vietnam-US Ties

A deal between the two countries would be a boost for President Trump and his team as they struggle to quickly close deals with the United States' biggest trading partners before deadlines. While the United States has teased a forthcoming deal with India, earlier agreements with Britain and China have been limited in scope. Talks with Japan, the United States' sixth-largest trading partner and closest ally in Asia, appear to have hit a snag.

The United States is Vietnam's biggest export market, and economic and diplomatic ties between the two countries have grown.

The news sent shares of major U.S. apparel and sportswear makers, including Nike (NKE.N), Under Armour (UAA.N) and North Face maker VF Corp (VFC.N), all higher on Wednesday.

Vietnam also wants the United States to recognize Vietnam as a market economy and lift restrictions on high-tech exports to Vietnam.

Growing Trade Relations

Since President Trump imposed hundreds of billions of dollars in tariffs on Chinese goods during his 2017-2021 term, US trade with Vietnam has boomed, as importers seek to avoid Chinese tariffs.

Since 2018, Vietnam's exports have nearly tripled, from under $50 billion that year to about $137 billion in 2024, according to U.S. Census Bureau data. U.S. exports to Vietnam have increased by only about 30% over the same period — to more than $13 billion last year from under $10 billion in 2018.

"'Transshipping' is a vague and often politicized term in trade enforcement," Dan Martin, a business consultant at Dezan Shira & Associates, said on LinkedIn. "How it's defined and how it's applied in practice will shape the future of US-Vietnam trade relations."

President Trump announced a wave of tariffs on countries around the world on April 2, before suspending most of them until July 9. More than a dozen countries are actively negotiating with the United States to avoid steep increases in tariffs on their exports.

The UK accepted 10% US tariffs on a range of goods, including cars, in exchange for special access to British aircraft engines and beef. Like the deal reached with the UK in May, the Vietnam deal is more of a framework than a completed trade deal.

China and the United States also reached a deal in their tit-for-tat tariff war, in which China restored US access to some rare earth minerals, but the two sides left most of their differences for later negotiations.

President Trump Announces 20% Tariff on Vietnam's Exports