Vietnam says tariff deal not final, after Trump’s claim

Talks between Vietnam and the U.S. about a tariff deal are still ongoing, even after Trump’s July 2 announcement. During Thursday’s press session in Hanoi, Foreign Ministry spokesperson Pham Thu Hang stated both parties are “continuing discussions to clarify and concretize related contents.”

She would not say if Hanoi had officially signed off on the provisions Trump described as finalized, adding that talks remain in progress and no comprehensive outline has been released.

According to Bloomberg, Vietnam’s senior officials were caught off guard by the announcement of a 20% levy, and sources indicate they are pushing for a lower rate. At the same time, American representatives have urged stronger safeguards to block Chinese products from being sent through Vietnam and rebranded to avoid steeper tariffs.

In private, Hanoi is navigating a delicate balance. China is its top trade partner, and Beijing has cautioned that it may retaliate if Vietnam gives in easily to U.S. conditions. Meanwhile, Washington expects Vietnam not only to curb transshipment but also to enhance collaboration on key strategic issues.

Last week, during a U.S.-ASEAN Business Council meeting, Prime Minister Pham Minh Chinh encouraged U.S. companies to support Hanoi’s push to finalize the tariff pact. He revealed targets of 8.3% to 8.5 % GDP growth for the year despite ongoing trade‑related doubts.

Tariffs cast shadow over three decades of U.S.-Vietnam relations

Tariff talks are a departure from the past thirty years of friendly relations between the U.S and Vietnam. Since establishing diplomatic relations in 1995, bilateral trade has grown, naval cooperation has strengthened, and cultural exchanges have increased.

The U.S. has poured hundreds of millions into post‑war reconstruction, and by 2017, positive views of America reached 84% among the Vietnamese. Biden’s 2023 visit upgraded their ties to a full strategic partnership.

However, in April, the Trump administration imposed a 46% tariff on goods from Vietnam, reversing much of the earlier progress. Then on July 2, Trump claimed Vietnam would eliminate tariffs on U.S. exports while agreeing to a standing 20% tariff on Vietnamese shipments and 40% on those identified as Chinese‑origin products passing through the country.

Hanoi publicly accepted the presumed arrangement despite no formal endorsement of its specifics. Analysts argue this was done to safeguard the wider U.S.-Vietnam relationship, even at the cost of notable compromises.

The U.S. position has also been contradictory. Commerce Secretary Howard Lutnick described Vietnam as “just a pathway of China to us,” implying that products with Chinese components could incur the 40% levy. Going by that, Vietnamese goods could face harsher rates than Chinese‑made items, which now face an average rate of 27.9%.

Commentators caution that this tariff framework may undo manufacturers’ relocations from China to Vietnam, reviving supply‑chain vulnerabilities that China could leverage in negotiations, potentially undermining both economies and pushing them closer to Beijing over time.

Vietnam’s longstanding balancing act between the U.S. and China

Vietnam’s history of balancing dominant neighbors is well established. After millennia under Chinese dominion and the unresolved 1979 border conflict, the country now mirrors Beijing’s one‑party governance while pursuing market‑oriented reforms that drive export expansion.

As one Vietnamese saying goes, “always resist China and befriend China.” This balancing extends well beyond trade.

To challenge Beijing’s regional sway, Vietnam has bolstered naval cooperation with the U.S., freed prominent political detainees to maintain Washington’s goodwill, and yet simultaneously partners with China on security enforcement within its borders.

Recently, Hanoi has offered tactical compromises. During trans‑Pacific partnership talks, it permitted the formation of independent trade unions, a landmark change for a single‑party regime, to lessen Chinese dependency.

As negotiations intensify, Vietnam is simultaneously pushing for formal market‑economy recognition and entry to advanced U.S. technologies in exchange for its compromises. Hanoi deems these objectives critical for strengthening ties with U.S. businesses, even as the new tariffs threaten to hinder progress.

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