U.S. President Donald Trump announced a trade cope with Vietnam Wednesday that will allow U.S. goods to enter the country duty-free.
Vietnamese exports to the USA, in contrast, would face a 20% levy.
On his Truth Social platform, Trump declared the pact “a Great Deal of Cooperation between our two Countries.”
The deal helps corporations that import a lot of things from Vietnam, including Nike, whose stock rose 4.1%. Factories in Vietnam made half of all Nike brand footwear in its fiscal 12 months of 2024.
Nike’s stock rally helped drive U.S. markets higher on Wednesday to hit one other all-time high.
In April, Trump announced a 46% tax on Vietnamese imports — one in every of his so-called reciprocal tariffs targeting dozens of nations with which the USA runs trade deficits. Trump promptly suspended the reciprocal tariffs for 90 days to permit for negotiations just like the one with Vietnam.
The pause expires Tuesday, but thus far the Trump administration has reached a trade agreement with only one in every of those countries — the UK. (Trump has also reached a “framework” agreement with China in a separate trade dispute.)
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“Vietnam has been very keen to get out from under this,” said Mary Lovely, senior fellow on the Peterson Institute for International Economics. ”That is forcing a smaller country to eat it, principally. We are able to do this. It’s the massive countries that everyone’s keeping their eyes on.” She doubts that Trump will give you the option to impose such a lopsided agreement on big trading partners corresponding to the European Union and Japan.
The US last 12 months ran a $122 billion trade deficit with Vietnam. That was the third-biggest U.S. trade gap — the difference between the products and services it buys from other countries and people it sells them — behind those with China and Mexico.
Along with the 20% tariffs, Trump said the U.S. would impose a 40% tax on “transshipping” — goods from one other country that stop in Vietnam on their technique to the USA. Washington complains that Chinese goods have been dodging higher U.S. tariffs by transiting through Vietnam.
William Reinsch, a former U.S. trade official now with the Center for Strategic and International Studies, said the importance of the transshipment crackdown will rely on “how the term is defined and enforced. Some transshipment is outright fraud – simply changing the label; some is a legitimate substantial transformation in Vietnam right into a recent product; and there’s lots in between. Enforcement is at all times complicated.”
A February study within the Harvard Business Review found that there was “much less rerouting than previously believed.”
In May, Vietnam approved a $1.5 billion project by the Trump Organization and a neighborhood partner to construct an enormous golf resort complex near Hanoi, covering an area roughly the scale of 336 football fields.
Vietnam was a beneficiary of American efforts to counter China’s influence. Firms seeking to diversify their supply chains away from China flocked to Vietnam.
In 2023, it became the one country to host each President Joe Biden and Chinese leader Xi Jinping on state visits. That 12 months, the U.S. upgraded Vietnam to its highest diplomatic status—comprehensive strategic partner—placing it on par with China and Russia.
© 2025 The Canadian Press