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US agrees Vietnam trade deal, 20% tariff on Vietnam goods, US to get 'total access' to Vietnam markets
40% tariff on goods transshipped through Vietnam.
July 03, 2025, 02:08 PM
The US has agreed a new trade deal with Vietnam that has both good and bad news for the Southeast Asian country.
The tariff of 20 per cent that President Donald Trump slapped on Vietnamese exports is lower than the 46 per cent he initially imposed.
However, the 20 per cent tariff is twice the "baseline tariff" of 10 per cent that Trump has imposed on other countries, including Singapore.
The deal also includes a 40 per cent tariff on goods from third countries transhipped through Vietnam en route to the U.S.
Other than the tariff on Vietnamese goods, Vietnam will open up its own markets and offer tariff-free access to all U.S. goods, Trump claimed in a Truth Social post.
There were no extensive details on tariffs for specific sectors, beyond a mention of "SUV" cars for Vietnam's market.
According to the state-run media outlet Vietnam News, "General Secretary Tô Lâm and President Donald Trump welcomed the agreement reached by the two countries' negotiating teams", and called it a joint statement on a trade agreement framework.
On his part, Trump called it a "Great Deal of Cooperation" and said that dealing with Tô was a "genuine pleasure".
Trouble with China?
However, the 40 per cent tariff on third-party, transshipped goods could raise the ire of China.
Bloomberg speculates that the measure could be aimed at China, who is Vietnam's largest trading partner and has used such methods to circumvent U.S. tariffs.
China could retaliate against such a measure that affects their interests, which in turn would negatively impact the Vietnamese economy.
In addition, Vietnam's ready acceptance of 20 per cent tariffs could see Vietnam lose up to 25 per cent of its exports to the U.S. in the medium term.
Bloomberg also noted that the Vietnam deal was light on details on sector-specific tariffs and exemptions, which is of major concern to other countries negotiating with the U.S., like Japan and South Korea.
Top image from AFP.
