WASHINGTON (AP) — President Donald Trump has announced a new trade agreement with Vietnam on Wednesday, allowing U.S. goods to enter the country duty-free while imposing a 20% levy on Vietnamese exports to the United States. Trump hailed the deal as “a Great Deal of Cooperation between our two Countries” on his Truth Social platform.
Earlier in April, Trump had initiated a 46% tax on Vietnamese imports as part of his reciprocal tariff strategy targeted at countries where the United States runs trade deficits. He then suspended these tariffs for 90 days to facilitate negotiations, leading to the recent agreement with Vietnam. Despite the looming expiration of the tariff pause, the Trump administration has only concluded trade deals with the United Kingdom and has a preliminary agreement with China in a separate dispute.
Mary Lovely, a senior fellow at the Peterson Institute for International Economics, noted that Vietnam was eager to resolve the trade issues and avoid the heavy tariffs. However, she expressed skepticism about imposing similar terms on larger trading partners like the European Union and Japan. The U.S. faced a significant $122 billion trade deficit with Vietnam last year, making it the third-largest deficit behind China and Mexico.
In addition to the 20% tariffs, Trump also announced a 40% tax on “transshipping” goods passing through Vietnam on their way to the U.S., particularly to address Chinese goods evading higher U.S. tariffs. William Reinsch from the Center for Strategic and International Studies emphasized the importance of defining and enforcing transshipment rules to combat fraudulent practices.
Vietnam recently approved a $1.5 billion project with the Trump Organization to develop a large golf resort near Hanoi. The country has benefitted from U.S. efforts to reduce dependence on Chinese supply chains, attracting companies seeking diversification. Vietnam’s diplomatic standing has also risen, hosting visits from both President Joe Biden and Chinese leader Xi Jinping in 2023 and being elevated to a comprehensive strategic partner by the U.S., alongside China and Russia.
Reported by Aniruddha Ghosal from Hanoi, Vietnam.
