Trump Aims to Foster Trade Relations with Vietnam Through New Agreement

The deal announced is expected to alter the tariff landscape for both nations, with potential ramifications for trade involving China.

On July 2, 2025, President Trump declared that the United States would embark on a preliminary trade agreement with Vietnam, which aims to relax some previously imposed tariffs on Vietnamese imports. This development arises during a period marked by increased U.S. imports from Vietnam, particularly since the initiation of Trump's first term, when substantial tariffs on Chinese goods compelled manufacturers to relocate their operations to Vietnam.

In his announcement via Truth Social, Trump characterized the agreement as "a Great Deal of Cooperation between our two Countries.” As per the outlined terms of the preliminary deal, a fixed 20 percent tariff will be applied to all imports from Vietnam. Additionally, a steep 40 percent tariff will target any goods “transshipped” through Vietnam that originate in China. This clause is a direct response to concerns raised by the Trump administration regarding how some countries have been utilized as conduits for Chinese manufacturers to sidestep U.S. tariffs.

The specific products that would incur the higher tariff rate remain ambiguous. The application could involve items brought into the U.S. from Vietnam that actually have their origins in China. Alternatively, it could affect Vietnamese manufactured goods that incorporate a significant amount of Chinese components. There are whispers that the agreement might incorporate a grading matrix, where tariffs could be adjusted based on the ratio of Chinese content utilized in the manufacturing of Vietnamese goods.

Howard Lutnick, the Secretary of Commerce, reaffirmed this stance on social media, highlighting that if any nation supplies their goods through Vietnam to reach U.S. markets, they would face the hefty 40 percent tariff, thereby signaling stricter measures against indirect Chinese imports. In light of these developments, industry experts are keenly analyzing the implications of this evolving trade relationship as leaders from both countries prepare to negotiate and finalize the agreement.