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Donald Trump said that the US had concluded a trade agreement with Vietnam in a deal that would lower the “mutual rate” of Washington in the export of the Asian country to 20 percent.
The new rate level represents a more than halve the 46 percent tax levy that was initially imposed on Vietnam during his rate blitz “Liberation Day” on 2 April, but is higher than the 10 percent rate where it was reduced for 90 days while trade discussions took place.
The deal makes Hanoi one of the few capitals to reach a trade agreement with Washington in the past three months. But the steepness of the rates that are appropriate could still reveal countries that can still obtain a considerable lighting of the taxes announced in April, which at that time caused a sale of the financial market and the global trade.
Describing the deal as “something they have never done before,” Trump said in a social function truth on Wednesday in which the agreement was described that Vietnam would give the US “total access” to their market and that “we can sell our product in Vietnam at a zero rate.”
The US will also charge Vietnam a rate of 40 percent for “transfer”, since Washington tries to resolve companies that send products in China through other countries to prevent high levies on Chinese goods.
Vietnam’s official state media reported that Vietnam’s communist party chief was holding a phone call with Trump on Tuesday and the two parties reached a consensus on an “fair and balanced mutual trade agreement framework”.
During the call, Trump “confirmed that the US will considerably reduce the mutual rates for many Vietnamese exports,” state media reported, without referring to specific rating rates.
“The basic line rate of 20 percent for Vietnamese import is higher than expected, so that fear is undoubtedly caused by other trading partners trying to complete deals,” said Wendy Cutler, a former American trade officer who is now as a vice-president at the Asia Society Policy Institute.
Hanoi, however, had a “strong interest” to reach a deal with Washington, given almost 30 percent of Vietnam export intended for the US, Cutler said.
The export from the Southeast Asian country to the US has risen in recent years because manufacturers have moved production from China to prevent American rates, whereby Vietnam organizes the will of Apple, Samsung and Nike. In 2024, the US exported $ 13.1 billion in goods to Vietnam, according to the US government figures, but they imported $ 136.6 billion in the same period.
The Trump government has accused Vietnam of being a channel for Chinese exporters who try to avoid a criminal high American rates at Beijing. The practice, known as a transfer, had become a critical issue in Hanoi’s negotiations with Washington.
Many companies collect components that are made in China in other countries, including Vietnam and the Southeast Asian colleagues, or add the products sufficient value to legally change their place of origin. However, some only surrender their products without any added value, a practice that is illegal but difficult to trace.
Although the lower rates offer some lighting for Vietnam, it is unclear how the dual tariff system announced by Trump would work. It is also unclear how Hanoi can trace the transfer and what percentage of export would be affected by the higher 40 percent percentage.
Alicia GarcÃa-Herrero, Chief Asia-Pacific Economist at the French investment bank Natixis, said that the 20 percent flat rate “not too bad” was for Vietnam as long as the American rates in China remained relatively higher.
“The question is whether there is a small print – for example, Vietnam who imposes rates for products and imported inputs from China that are vital for production economy,” she said.
The deal with Vietnam came a day after Trump threatened to increase taxes on Japan and doubted that Washington would reach a deal with Tokyo.
Additional reporting by Peter Foster in London
