Trump announced a US-Vietnam trade deal with a 20% tariff on exports and 40% on transshipped goods; Vietnam offered zero tariffs on US products.
The new accord on trade with Vietnam was announced by President Donald Trump days before he had set a deadline of July 9 to lift tariffs on imports. According to the new deal, the Vietnamese exports will be charged with a tariff of 20 percent on their exports to the United States. Transiting goods in other countries into Vietnam will attract a 40 percent duty. On her part, Vietnam has agreed to import American goods at a zero tariff.
His post on his social channel came after he talked to Vietnamese President To Lam. Later, the Vietnamese government confirmed that both states had agreed on a general trade framework. Nevertheless, it failed to verify specific tariff rates as stated by the U.S. side. The new deal is unlike the previous one announced by Trump in April, which would have resulted in a 46 percent tariff on Vietnamese goods. The administration is attempting to eliminate this trade tension and ensure that businesses on both sides are clear about the deal by settling this deal well within the deadline set by the administration.
Economic Impact and Enforcement Challenges
Vietnam has become the 10th trading partner of the United States. Vietnamese exports to the U.S. have grown almost three times as much since 2018, which began at a little under 50 billion and will be about 137 billion in 2024. U.S exports to Vietnam have recorded a more modest growth, reaching 13 billion dollars in the same period.
U.S. officials also feel that certain Chinese goods are avoiding increased tariffs by evading transit through Vietnam. The new 40 percent transshipment duty is set to resolve this. However, according to trade specialists, its application can be even trickier, and it is based on how the concept of transshipment will be defined and checked.
Broader Trade Strategy Ahead of July Deadline
The Trump administration has been in dialogue with over a dozen countries to prevent a tariff surge that will take effect on July 9. The UK had earlier received only a 10 percent tariff on trade by agreeing that it would give it certain access to the market. A similar accord was reached with China, but many trade issues have not been solved.
In Vietnam, the U.S. review of Vietnamese requests to be recognized as a market economy and eliminating restrictions on high-tech exports is still in focus. The trade agreement will assist both countries in maintaining diplomatic and economic relations as world trade evolves.
