President Donald Trump announced Wednesday that the United States has reached a trade agreement with Vietnam, imposing a 20% tariff on Vietnamese imports while securing zero-tariff access for U.S. goods in the Vietnamese market. The deal, outlined on Trump's Truth Social account, arrives less than a week before his administration's 90-day pause on reciprocal tariffs is set to expire on July 9.
"It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam," Trump wrote, claiming he personally negotiated the terms with General Secretary To Lam of the Communist Party of Vietnam. "Vietnam will pay the United States a 20% Tariff on any and all goods sent into our Territory, and a 40% Tariff on any Transshipping."
Transshipping refers to the practice of rerouting goods from one country through another to bypass tariffs-an issue the Trump administration has repeatedly tied to China, which has been accused of funneling goods through Vietnam. U.S. Commerce Secretary Howard Lutnick confirmed that transshipped goods would now face a 40% tariff if originating outside Vietnam.
In exchange, Vietnam has reportedly agreed to open its markets fully to U.S. exports, allowing products such as large-engine vehicles to enter the country tariff-free. "They will 'OPEN THEIR MARKET TO THE UNITED STATES,' meaning that, we will be able to sell our product into Vietnam at ZERO Tariff," Trump wrote.
The timing of the announcement is significant. Vietnamese goods had previously been subject to a 46% tariff under Trump's protectionist trade scheme, reduced to 10% during the current 90-day reprieve. Whether the 20% duty announced Wednesday is additive or replaces the 10% rate remains unclear. U.S. Deputy Treasury Secretary Michael Faulkender told CNBC that more details would likely be released by the end of the trading day.
Vietnam is a critical trade partner, accounting for $137 billion in U.S. imports last year. It ranks as the sixth-largest source of foreign goods, with computers, electronics, apparel, and furniture among top categories. Vietnam also represents America's third-largest trade deficit, which hit $123 billion in 2023, up from $56 billion in 2019.
The agreement may curb Vietnam's rise as an alternative to China in global supply chains, a shift accelerated by tariffs first imposed by Trump during his first term and largely upheld by President Joe Biden. Vietnam has attracted manufacturers fleeing Chinese tariffs, creating tensions over alleged transshipment.
Markets responded positively. Shares of major Vietnam-reliant companies including Nike, Columbia Sportswear, and VF Corporation all climbed following Trump's announcement. Nike gained 4.2%, Columbia 1.3%, and VF 1.5% by mid-afternoon. The S&P 500 rose 0.38% to hit a record high, while the Nasdaq Composite gained 0.82%. The Dow Jones Industrial Average, initially in the red, pared losses to close down just 0.1%.
