Vietnam Trade Deal Announced

On July 2, 2025, President Trump announced that the United States has entered into a new trade agreement with the Socialist Republic of Vietnam. This agreement introduces significant reductions in the country-specific rate for Vietnamese goods imported into the United States while providing duty free access for U.S. exports into the Vietnamese market. According to the President’s statement, this deal was reached following direct discussions between U.S. officials and General Secretary To Lam of Vietnam’s Communist Party.

BACKGROUND

On Wednesday, April 2, 2025, President Trump signed an executive order imposing “reciprocal tariffs” that touch and concern just about every good imported into the United States. In the beginning, all imported articles were to be subject to a 10% ad valorem duty rate, additional to other duties and taxes. Later, the 10% ad valorem duty rate was scheduled to increase to rates individually calculated for each country. The country-specific rates came into effect at 12:01 a.m. on April 9, 2025. The rate for Vietnam was set to 46%.

These heightened rates were short lived, however. President Trump announced via Truth Social that the country-specific tariff rates would be paused for 90 days to allow for negotiations, and that the 10% rate would apply instead.

Tensions were heightened this week as the July 9 deadline to reach an agreement loomed. The President reportedly announced that the deadline for the country-specific rates would not be extended. Before Vietnam, the United Kingdom and China were the only countries to solidify a trade deal.

THE TERMS OF THE VIETNAM TRADE DEAL

The President announced the conclusion of the trade deal via Truth Social, saying:

It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam after speaking with To Lam, the Highly Respected General Secretary of the Communist Party of Vietnam. It will be a Great Deal of Cooperation between our two Countries. The Terms are that Vietnam will pay the United States a 20% Tariff on any and all goods sent into our Territory, and a 40% Tariff on any Transshipping. In return, Vietnam will do something that they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade. In other words, they will “OPEN THEIR MARKET TO THE UNITED STATES,” meaning that, we will be able to sell our product into Vietnam at ZERO Tariff. It is my opinion that the SUV or, as it is sometimes referred to, Large Engine Vehicle, which does so well in the United States, will be a wonderful addition to the various product lines within Vietnam. Dealing with General Secretary To Lam, which I did personally, was an absolute pleasure. Thank you for your attention to this matter!

Under the terms described in the announcement, all goods originating in Vietnam will be subject to a 20% import tariff upon entry into the United States. This marks a substantial reduction from the 46% rate originally imposed, and will directly impact the landed costs of Vietnamese products.

In addition, any goods transshipped through Vietnam will be subject to an even higher tariff of 40%. These measures are intended in part to discourage transshipment practices and reinforce enforcement of origin requirements. It is unclear from the announcement whether the 40% duty in transshipping will be applied by Vietnam or by the United States.

In exchange, the Vietnamese government has reportedly agreed to grant the United States full and unrestricted access to its markets. This commitment is described as a removal of all tariffs on U.S.-origin products entering Vietnam. For U.S. exporters, this development could create meaningful new opportunities to expand sales in Vietnam across sectors such as agriculture, machinery, and automotive products. The President specifically noted that large-engine vehicles and SUVs could see increased demand under these more favorable conditions.

For U.S. importers and freight forwarders, however, the immediate implications of this agreement are likely to center on cost increases and compliance adjustments. Companies that source merchandise from Vietnam should begin reviewing their existing contracts, pricing strategies, and customs declarations in anticipation of the higher tariffs. In particular, importers should evaluate whether current supply chains involve any risk of transshipment exposure, as the new 40% tariff could substantially increase duties owed if goods are not properly documented.

The agreement has been announced but may still require formal implementation, including potential rulemaking by U.S. Customs and Border Protection. Importers and logistics providers should monitor for further guidance on effective dates, updated entry procedures, and any required certifications or documentation to claim preferential treatment when exporting to Vietnam.

Our team is closely tracking this development and will provide updates as additional details become available. As new tariff regulations continue to evolve, navigating these changes requires experienced legal counsel. At Liang + Mooney, PLLC, our seasoned tariff lawyers can answer your questions and concerns with sophisticated legal solutions.  If you seek strategic counsel and insight into how these changes could affect your operations, we invite you to contact us to schedule a consultation.