President Trump scores major win for American businesses with landmark Vietnam trade deal, securing zero tariffs for U.S. goods while imposing strategic tariffs on Vietnamese imports to protect American interests.
Key Takeaways
- Vietnam will pay a 20% tariff on exports to the U.S. and a 40% tariff on goods transshipped through Vietnam, effectively targeting Chinese circumvention attempts.
- U.S. goods will enter Vietnamese markets completely tariff-free, opening significant new opportunities for American businesses.
- The deal replaces a previously threatened 46% tariff on Vietnamese goods, representing a more balanced approach to trade relations.
- The agreement follows direct negotiations between President Trump and Vietnam’s General Secretary To Lam, demonstrating Trump’s commitment to personal diplomacy.
- Vietnam represents a crucial trading partner, with bilateral trade estimated at $149.6 billion in 2024, though currently with a $123.5 billion deficit favoring Vietnam.
America First Trade Strategy Delivers Results
President Trump has secured a groundbreaking trade agreement with Vietnam that significantly rebalances the trading relationship between the two nations. The deal establishes a 20% tariff on Vietnamese exports to the United States while imposing a steeper 40% tariff specifically targeting the practice of transshipping – where Chinese manufacturers attempt to bypass U.S. tariffs by routing products through Vietnam. Most importantly for American businesses, the agreement grants U.S. products complete tariff-free access to Vietnamese markets, creating substantial new export opportunities.
The agreement represents a strategic victory in Trump’s broader trade agenda aimed at protecting American jobs while expanding markets for U.S. goods. Vietnam has emerged as a critical manufacturing hub, particularly for footwear and apparel, accounting for approximately 25% of shoe production imported to the United States. The new framework replaces a previously threatened 46% tariff that had been temporarily suspended for 90 days to facilitate negotiations.
The details within the trade agreement are unique. President Donald Trump has announced a trade agreement between the USA and Vietnam. Interestingly Vietnam will face a 20% tariff rate (baseline) and a 40% tariff rate on transnational shipping.
The 40% transnational shipping… https://t.co/KNaLz4FUp7
— TheLastRefuge (@TheLastRefuge2) July 2, 2025
Targeting Chinese Circumvention of Tariffs
A key component of the new trade framework is its strong measures against transshipping – the practice where Chinese manufacturers route goods through Vietnam to avoid U.S. tariffs on Chinese products. The 40% tariff specifically targets these practices, addressing longstanding concerns about intellectual property theft and unfair trade advantages. U.S. officials have consistently alleged that China uses Vietnam as a backdoor to bypass tariffs by routing goods through the country, which are then falsely labeled as “Made in Vietnam.”
“Vietnam will pay the United States a 20 percent tariff on any and all goods sent into our territory, and a 40 percent tariff on a Transshipping,” stated U.S. President Donald Trump.
The Vietnamese government has responded seriously to these concerns, with the Government Office holding an emergency meeting to address U.S. concerns over intellectual property violations and transshipment abuses. This heightened attention demonstrates Vietnam’s commitment to maintaining positive trade relations with the United States while balancing its economic ties with neighboring China, which remains Vietnam’s largest export market and a major source of investment.
Impact on American and Vietnamese Industries
The trade agreement will have significant impacts across multiple industries, particularly in footwear and apparel sectors. Vietnam currently supplies the U.S. with 274 million pairs of shoes annually, representing over half of all athletic footwear imports by both volume and value. Industry representatives have expressed cautious optimism about the deal, noting that while the 20% tariff is higher than temporary rates, it’s substantially lower than the initially threatened 46% tariff.
“Vietnam is essential to the U.S. footwear supply chain, especially for athletic shoes. In 2024, we imported 274 million pairs from Vietnam, accounting for over half of all athletic footwear imports by volume and value,” said Matt Priest, President and CEO of the Footwear Distributors and Retailers of America.
For Vietnamese industries, the trade agreement provides certainty and stability in their access to the crucial U.S. market, albeit with the new tariff structure. Meanwhile, American exporters stand to gain significantly from the zero-tariff access to Vietnamese markets, potentially helping to address the substantial $123.5 billion trade deficit the U.S. currently has with Vietnam. This arrangement exemplifies President Trump’s consistent focus on reducing trade deficits and creating more balanced trading relationships that benefit American workers and businesses.
Part of a Broader Trade Strategy
The Vietnam agreement is just one component of President Trump’s comprehensive approach to international trade negotiations. The administration has already finalized a trade deal with the United Kingdom and is actively engaged in negotiations with 14 other countries, including major economies such as India, Japan, and Mexico. The temporary reduction of Chinese tariffs to 30% signals a willingness to negotiate while maintaining a firm position on fair trade practices.
“With respect to Vietnam — the second largest supplier for footwear, apparel, and accessories sold into the U.S. market — we look forward to learning the details related to today’s news so that we, together with our members, can evaluate how well it will provide relief and certainty,” said Steve Lamar, President and CEO of the American Apparel and Footwear Association.
President Trump has hinted at a potentially “very big” deal with India, another significant footwear production hub. With the 90-day pause on various tariffs set to expire in early July, the administration is working diligently to establish new trade frameworks that protect American interests while fostering productive international economic relationships. The Vietnam agreement demonstrates Trump’s ability to secure terms that put America first while maintaining crucial trading partnerships.
