Trump Announces US-Vietnam Trade Deal, Sets 20% Tariff

International Desk

US President Donald Trump has announced a new trade agreement between the United States and Vietnam, under which a 20% tariff will be imposed on imports from Vietnam.

Vietnamese products were originally set to face a 46% tariff starting next week, as part of Trump’s “reciprocal tariff policy” announced in April. However, this new deal was finalized following last-minute negotiations.

Trump stated that under this agreement, Vietnam will not impose any tariffs on products coming from the United States — meaning a zero-tariff rate. On social media, Trump said, “Vietnam is now doing something it has never done before — it will give the United States full access to its market.”

As part of the deal, however, the US will impose a 40% tariff on products shipped through Vietnam from other countries via “trans-shipping” processes. Trump’s trade advisor Peter Navarro claimed that one-third of goods sent to the US from Vietnam are actually of Chinese origin and are rerouted through Vietnam.

A tariff is an import tax that is generally paid by the importing company. While the importer may bear the cost, it is often passed on to consumers. Many countries fear that such tariffs will reduce demand for their products.

Vietnam has become a major production hub for global brands like Nike, Apple, Gap, and Lululemon. Following Trump’s earlier tariffs on China, many companies relocated their factories to Vietnam.

After the announcement of the deal, shares of many Vietnam-based manufacturers initially rose, but dropped slightly following the news of the 20% tariff.

Adam Sitkoff, Executive Director of the American Chamber of Commerce in Hanoi, told the BBC that the deal is “favorable” for Vietnam and that “exports from Vietnam to the US will continue.” Regarding trans-shipping tariffs, he said, “This term is often vague and used politically.”

On Wednesday, Trump and Vietnam’s Communist Party General Secretary To Lam spoke by phone, during which To Lam renewed his invitation for Trump to visit Vietnam.

Meanwhile, Trump’s family business, the Trump Organization, recently announced a \$1.5 billion investment in Vietnam for a hotel, golf course, and luxury residential project in partnership with local company Kinh Bach City Development.

The company is also scouting locations for a Trump Tower in Ho Chi Minh City.

In April, Trump imposed high tariffs on various global trade partners, citing “insufficient reciprocity.” These were later temporarily reduced to 10% to allow time for negotiation.

So far, after temporary agreements with the UK and China, this deal with Vietnam marks another major announcement from the Trump administration.