World

The US and Vietnam reach an agreement on tariffs

Jul 7, 2025 United States

US President Donald Trump announced that the US would impose lower-than-expected tariffs of 20% on many Vietnamese exports, and 40% on transshipments through Vietnam from third countries

It is the second trade deal (not counting the framework agreement with China) that the North American country has struck, after the one with the UK. This was done ahead of the 9^th of July deadline for the end of the pause on reciprocal tariffs.

Under the terms of the deal, Vietnamese goods produced locally will be taxed at 20%, while those originating from other countries and re-exported to the US will be taxed at 40%. In return, US goods will enter Vietnam duty-free.

“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”, wrote Donald Trump in a post on Truth Social.

The agreement follows months of talks and a series of concessions by Vietnam to negotiate a reduction in tariffs. These were initially set at 46%, triggering an alarm in the export-dependent Asian nation. In 2024, Vietnam exported goods worth approximately 136 billion US dollars to the US.

“This is an important negotiation result, creating hope and expectations for businesses”, said Finance Minister Nguyen Van Thang at a cabinet meeting.

Image Credits: thediplomat.com

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