Trump announces Vietnam trade deal, 20% tariff on itsimports to U.S.
Source
American Shipper
Post Date
07/03/2025
Key Points
? President Donald Trump said the United States has struck atrade deal with Vietnam.
? The agreement includes a 20% U.S. tariff on Vietnamesegoods, as well as a 40% ?ransshipping?tariff, Trump said.
? Heannounced the deal days before a deadline paring back his ?eciprocal?tariffsis set to expire, sing U.S. duties on imports from dozens of countriessoaring.
President DonaldTrump said Wednesday that the United States has struck a trade deal with Vietnam that includes a 20% tariff onthe southeast Asian country? imports to the U.S.
Trump?announcement on Truth Social saidthat the deal will give the U.S. tariff-free access to Vietnam? markets.
Vietnamalso agreed that goods would be hit with a 40% tariff rate if they originatedin another country and were transferred to Vietnam for final shipment to theUnited States.
Theprocess, known as transshipping, is used to circumvent trade barriers. China, atop exporter to the U.S., has reportedly usedVietnam as a transshipment hub.
Trumpwrote that ?ietnam will pay?that 20% duty, but tariffs are taxes on foreigngoods that are paid by the importers of those products.
Theagreement was unveiled less than a week before a 90-day pause on many ofTrump? so-called reciprocal tariffs was set to expire, sing U.S. duties onimports from dozens of countries soaring.
Underthat protectionist trade scheme, Vietnamese imports to the U.S. were subject toa 46% blanket tariff. That rate was lowered to 10% during the 90-day interim.Raising the tariff on Vietnamese goods to 20% will hike costs for U.S.importers, which could be passed on to consumers or suppliers.
The S&P 500 nevertheless rose slightlyon news of the trade deal.
ReadTrump? full post:
?t is myGreat Honor to announce that I have just made a Trade Deal with the SocialistRepublic of Vietnam after speaking with To Lam, the Highly Respected GeneralSecretary of the Communist Party of Vietnam. It will be a Great Deal ofCooperation between our two Countries. The Terms are that Vietnam will pay theUnited States a 20% Tariff on any and all goods sent into our Territory, and a40% Tariff on any Transshipping. In return, Vietnam will do something that theyhave never done before, give the United States of America TOTAL ACCESS to theirMarkets for Trade. In other words, they will ?PEN THEIR MARKET TO THE UNITEDSTATES,?meaning that, we will be able to sell our product into Vietnam at ZEROTariff. It is my opinion that the SUV or, as it is sometimes referred to, LargeEngine Vehicle, which does so well in the United States, will be a wonderfuladdition to the various product lines within Vietnam. Dealing with GeneralSecretary To Lam, which I did personally, was an absolute pleasure. Thank you foryour attention to this matter!?
Itwas unclear from Trump? post when the deal will take effect, or if it has beenofficially signed by both parties.
Trumphas signaled that he may ignore or revise the upcoming deadline for hisreciprocal tariffs to snap back higher. The 90-day pause, which lowered tariffson nearly all other countries to a blanket 10% rate, was imposed in early Aprilto give countries breathing room while they negotiate deals with the U.S.
Withthe deadline approaching, the Trump administration has only struck revisedtrade frameworks with China and the United Kingdom, though it has repeatedlysaid the U.S. is close to deals with numerous other countries.
Vietnam,whose exports to the U.S. reportedly comprised 30% of its gross domestic product lastyear, is especially vulnerable to Trump? tariffs.
Criticsof Trump? unpredic tariff policies warn that the duties economicuncertainty and will result in higher prices for U.S. consumers. The Trumpadministration and its defers counter that tariffs do not cause inflationand note that the president? duties have brought in billions of dollars to theU.S. government.
Apricing model d for CNBC this month by retail consulting groupAlixPartners found that a 10% U.S. tariff on Vietnamese goods wouldcause the price of an imported men? sweater to rise by about 8%. Under the 46%tariff Trump initially slapped on Vietnam, the price of that same sweater wouldrise roughly 35%, the group found.
U.S.Federal Reserve Chairman Jerome Powell said Tuesday thatofficials expect the impacts of Trump? tariffs will start to show up moreduring the summer months.
Priceson certain items, including apparel and footwear, are already ticking higher asa result of the tariffs, CNBC has reported.
Someanalysts believe the lack of a widespread impact on U.S.prices so far is the result of pre-tariff stockpiling by companies, as well asthe time it takes for those tariffs to show up in the economy.
