Trump Announces New Agreement to Eliminate Tariffs on American Products in Vietnam

A recent publication by Bloomberg reveals that President Donald Trump has struck a trade agreement with Vietnam on July 2, allowing American products to enter the Vietnamese market without tariffs. However, this deal comes at a cost for Vietnam as thier exports to the U.S. will incur a hefty 20% tariff.

On his Truth Social platform, Trump hailed this arrangement as “a Great Deal of Cooperation between our two Countries.”

This follows an earlier announcement where Trump imposed a staggering 46% tax on imports from Vietnam—part of his strategy targeting nations contributing to America’s trade deficits. Although he temporarily suspended these tariffs for negotiations lasting until July 9, only one country—the United Kingdom—has reached an agreement so far.

“our trade deal with Vietnam is a massive win for America’s businesses and farmers!”“For the FIRST TIME EVER, they will pay us to sell their products here,” tweeted Howard Lutnick on July 2.

Citing insights from Mary Lovely at the Peterson Institute for International Economics, she notes that smaller nations like Vietnam often bear the brunt of such agreements. “This puts them in a tough spot,” she explains. “It’s easier to impose these terms on smaller players than it is with larger economies like Japan or those in Europe.”The U.S.’s trade deficit with Vietnam reached $122 billion last year—making it one of its largest gaps after China and Mexico.The new tariffs also include an additional charge of 40% aimed at goods transshipping through Vietnam from other countries—a move intended to curb Chinese products circumventing higher tariffs by passing through Vietnamese ports.A study published earlier this year in Harvard Business Review suggested that rerouting may not be as prevalent as previously thought.This month also saw approval for an enterprising $1.5 billion golf resort project near Hanoi backed by Trump’s organization and local partners—a clear sign that investment flows are still strong despite tariff tensions....

The ongoing geopolitical landscape has made companies eager to shift supply chains away from China towards more stable environments like Vietnam. Actually, during state visits in recent years by both President Joe Biden and Chinese leader Xi Jinping, it became evident just how crucial this relationship is becoming; especially when considering that the U.S. recently elevated its diplomatic ties with Vietnam to match those held with major powers like China and Russia!..

Aniruddha Ghosal contributed reporting from Hanoi..