- US-Vietnam deal sets 20% tariff on Vietnamese imports to the US.
- Vietnam agrees to a 40% tariff on transshipped goods to curb trade evasion.
- The US gains tariff-free access to Vietnamese markets under the deal.
President Donald Trump declared that the United States has finalized a trade deal with Vietnam that entails a 20% tariff on imports from Vietnam to the US. Trump's statement on Truth Social indicated that the agreement will provide the U.S. with tariff-free entry to Vietnam's markets, reports News.Az, referencing CNBC.
Vietnam also consented to impose a 40% tariff on goods that originated from another country and were then sent to Vietnam for final shipment to the United States. The method, referred to as transshipping, is utilized to bypass trade restrictions. China, a leading exporter to the U.S., has allegedly utilized Vietnam as a transshipment center.
Trump stated that “Vietnam will pay” a 20% tariff; however, tariffs are taxes on imported goods that are the responsibility of the importers of those products.
The deal was revealed just days before a 90-day suspension of many of Trump's alleged reciprocal tariffs was scheduled to end, causing American tariffs on imports from various nations to surge.
Under that protective trade policy, Vietnamese imports to the U.S. faced a 46% overall tariff.
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The S&P 500 increased modestly on reports of the trade agreement. However, clothing brands dependent on Vietnam's production abilities may encounter increased import expenses due to the revised tariff rate. Trump's post did not clarify when the agreement will start, nor if it has been formally signed by either side.
Trump has indicated that he might overlook or modify the approaching deadline for his reciprocal tariffs to increase again. The 90-day suspension, which reduced tariffs on almost all other nations to a uniform 10% rate, was enacted in early April to provide countries with some flexibility as they negotiated agreements with the U.S.
With the deadline approaching, the Trump administration has only negotiated updated trade agreements with China and the United Kingdom, despite frequently stating that the U.S. is near agreements with many other nations.
Vietnam, with exports to the U.S. allegedly making up 30% of its gross domestic product last year, is particularly susceptible to Trump’s tariffs.