Just ahead of the expiration of a 90-day pause on ‘reciprocal’ tariffs affecting numerous US trade partners, President Donald Trump has entered into a new trade agreement with Vietnam that reduces the import tax levied on goods from the country to 20 per cent from the earlier proposed 46 per cent.
Signed between Donald Trump and Lam, General Secretary, Communist Party of Vietnam, this ‘Great Deal of Cooperation,’ outlines, Vietnam will pay a 20 per cent tariff on all goods shipped to the US and a 40 per cent tariff on any ‘transshipping"’– meaning goods from other countries routed through Vietnam for final shipment to the United States.
Conversely, as part of this new agreement, Vietnam has pledged to grant the US total access to its markets with a zero-tariff rate, allowing American products to be sold there duty-free.
This agreement adjusts the general tariff rate against Vietnamese goods, which had been at 10 per cent during the 90-day pause initiated on April 9. The original ‘reciprocal’ tariff plan included a baseline 10 per cent duty for most trading partners and higher tariffs on specific goods like vehicles and auto parts.
Vietnam stands as the seventh-largest US trading partner, with two-way commerce totaling $149.6 billion in 2024. Last year, US imports from Vietnam reached $136.6 billion, primarily comprising apparel, electrical machinery, and footwear. Top US exports to Vietnam include raw cotton, integrated circuits, and telecommunications equipment.
