Trump has signed a new trade agreement with Vietnam

President Donald Trump announced today via Truth Social that the United States and Vietnam have reached a landmark trade agreement.

In the post, Trump shared that there will be a lot of cooperation between the two countries. Afterwards, he revealed the conditions in the agreement set for Vietnam. Following the deal, Vietnam will pay the United States a 20% tariff on all goods sent to their territory and a 40% on any transshipping.

In exchange, Vietnam will do something they have never done before: grant the United States complete access to their markets for trade. This means they will open their Market to the US, allowing them to sell their products in Vietnam with no tariffs. 

Trump mentioned that he made this deal after talking with To Lam, the General Secretary of the Communist Party of Vietnam. The US president anticipated that the SUV, or a Large Engine Vehicle, which is very popular in the United States, would be an excellent addition to the different product lines in Vietnam. According to Trump, working with the General Secretary was truly a pleasure for him.

Vietnam aims to finalize a trade deal with the US before the tariff deadline strikes 

Vietnam had already been subjected to a 46% tariff as part of Trump’s announcements about reciprocal tariffs for “Liberation Day.” Later, that tariff was put on hold for 90 days, and this suspension is set to expire next week.

In late June, following the deadline, Pham Minh Chinh, the Prime Minister of Vietnam, said he anticipated finalizing a trade agreement with the US before the deadline.

Chinh expressed that he believes the outcome will arrive in less than two weeks. The Prime Minister also speculated that good things will come their way.

Meanwhile, Vietnam and the US have a strong understanding of tariffs. The Office of the United States Trade Representative reported that 2024 goods trade between the US and Vietnam reached about $149.6 billion.

They also mentioned that US exports of goods to Vietnam in 2024 were $13.1 billion, a 32.9% increase worth $3.2 billion compared to 2023.

Additionally, they stated that in 2024, US imports of goods from Vietnam amounted to $136.6 billion, rising by 19.3% worth $22.1 billion from 2023. The trade deficit for the US with Vietnam was $123.5 billion in 2024, reflecting an increase of 18.1%  worth $18.9 billion over the previous year.

Vietnam faces pressure to balance the US and China in its trade activities

The Southeast Asian nation, China’s neighbour and huge recipient of Chinese investment, has found itself in a tight spot as it tries to keep trading with the US without conflicting with China. The United States happens to be its largest export market and a security ally, after all.

Vietnam’s Government Office, which oversees the country’s ministries, conducted an emergency talk with the government’s trade gurus on April 3 – the day President Trump had unveiled the tariffs.

Officials in the trade and customs ministries were given instructions to intensify their checks during the meeting and two weeks to come up with an effective strategy to tackle Illegal transshipment.

This was after it was revealed that some goods that Vietnam sent to the West have Chinese-made inputs, while Chinese companies have also set up factories to cater to US customers. In many cases, Vietnamese workers process the products, which are then legally sent to the US with a “Made in Vietnam” label.

American officials have accused China of running goods through Vietnam to gain lower tariffs for products that do not have much Vietnamese involvement.

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