Trump announces trade agreement with Vietnam
The United States will impose a 20% tariff on Vietnamese imported goods, while Vietnam will allow duty-free access to its market for American goods.
US President Trump announced on Wednesday that the US and Vietnam have reached a new trade agreement, which will impose a 20% tariff on goods exported from Vietnam to the US, and up to a 40% punitive tariff on "transshipped" goods. In exchange, Vietnam will open its market to American goods for the first time, implementing a zero-tariff policy.
Trump stated through his social platform Truth Social that the agreement was reached after a call with Vietnamese leaders. He wrote, "This will be a major cooperation agreement between our two countries. The terms include: Vietnam will charge a 20% tariff on all goods exported to the US, and a 40% tariff on all transshipped goods." Transshipping refers to goods from a third country being re-exported through Vietnam to the US in an attempt to bypass trade barriers.
In the agreement, Vietnam will "unprecedentedly" fully open its market to the US, allowing American goods to enter duty-free. Trump emphasized that large American engine vehicles (such as SUVs) would be ideal products for entering the Vietnamese market, "SUVs are performing very well in the US, and I believe they will become an important part of Vietnam's product line."
It is currently unclear whether the agreement has been formally signed or when it will take effect. Vietnamese media Vietnam News reported that Vietnam proposed during the call that the US should quickly recognize Vietnam as a market economy and lift export restrictions on certain high-tech products.
The announcement of this agreement comes less than a week before the 90-day suspension period for US "reciprocal tariffs" ends. This suspension period began in April this year, reducing import tariffs for most countries to 10%.
After July 9, if no new agreement is signed, the tariff on Vietnamese goods could rise to as high as 46%.
Vietnam is the sixth largest source of imports for the US. According to data from the Office of the US Trade Representative (USTR), the total value of goods exported to the US in 2024 exceeded $136 billion, far exceeding the level five years ago. Meanwhile, the bilateral trade deficit between the US and Vietnam reached $123 billion, making it the third-largest source of trade deficit for the US. This growing deficit has also made Vietnam one of the main targets of Trump's tariff policies. The total value of goods exported by the US to Vietnam is slightly over $13 billion.
Although Trump claimed "Vietnam will pay these tariffs," in reality, tariffs are import taxes, and the cost is ultimately borne by US importers. Experts warn that the new tariffs may increase the prices of consumer goods in the US, especially in industries such as clothing, electronics, and furniture that rely heavily on Vietnamese supply.
A model created by retail consulting firm AlixPartners for CNBC shows that a 10% tariff on Vietnamese goods could increase the price of imported men's sweaters by about 8%, while a 46% tariff could cause prices to surge by 35%. According to this new agreement, although the rate is reduced to 20%, it still represents a significant cost increase for some companies.
Currently, the stock prices of companies relying on Vietnamese manufacturing, including Nike, Lululemon, and Columbia, have risen.
Nike rose 3.1%, Columbia rose 1.5%, and Lululemon rose 0.7%. Overall, the S&P 500 index rose slightly by 0.25%, and the Nasdaq Composite, which is mainly composed of technology stocks, increased by 0.85%.
Source: rfi
Original: https://www.toutiao.com/article/1836587541236743/
Statement: This article represents the views of the author.