[CTC] US and Vietnam reach initial tariff deal

[Arthur Stamoulis]

*Here’s the President’s post on Truth Social….*

“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!”


https://www.politico.com/news/2025/07/02/u-s-and-vietnam-have-reached-loose-framework-for-further-trade-talks-00437236
 US and Vietnam reach initial tariff deal

*President Donald Trump said he will reduce tariffs on Vietnam while Hanoi
will open its market to U.S. agricultural products and strengthen rules of
origin standards to cut down on transshipment, according to a draft
statement obtained by POLITICO.*

The U.S. has notched a preliminary trade deal with Vietnam, President
Donald Trump announced Wednesday morning.

According to Trump, Vietnam will pay a 20 percent tariff on all imports
into the U.S. and a 40 percent tariff on goods that are shipped through
Vietnam from other countries. While that’s a lower tariff rate than Trump
initially threatened with his reciprocal tariffs, it would mark a higher
rate than Vietnam experienced during the three-month pause.
In exchange, Vietnam has committed to opening up its market to a variety of
U.S. imports that Hanoi has traditionally blocked, according to a draft
joint statement obtained by POLITICO.

The transshipment issue is a key Trump priority: White House trade adviser
Peter Navarro has called Vietnam a “colony of China”
<https://x.com/clashreport/status/1909126914955944318> for allegedly
relabeling Chinese goods for export to the U.S., thereby allowing China to
avoid much steeper tariffs on its exports.

“I just made a Trade Deal with Vietnam,” Trump posted on Truth Social
<https://truthsocial.com/@realDonaldTrump/posts/114784098546698642> on
Wednesday morning. “Details to follow!”

Trump said he spoke with Vietnam’s top leader To Lam on Wednesday morning,
calling him “an absolute pleasure” to deal with.

The Vietnam agreement is the first the Trump administration has inked to
suspend his threatened “reciprocal” tariffs of between 20 and 50 percent,
which are scheduled to kick in July 9. The White House previously reached a
deal framework with the United Kingdom, which was not subject to those
tariffs, as well as an agreement with China to pause triple-digit tariffs
until August.

The White House had promised dozens of such deals with countries facing the
higher tariffs, but as the deadline approaches, Trump and his top advisers
have hinted that they may extend the deadline for some of the negotiations.

The draft of the agreement with Vietnam says the two sides will continue to
work on a final deal to be sealed “within the coming weeks” that will
result in a “substantial reduction” in the U.S. tariffs on Vietnam’s
imports, though the draft statement did not include any details on where
the tariff level will ultimately end up, unlike Trump’s social media post.
Those tariff reductions will apply to a range of Vietnamese imports
including tech products, footwear, agricultural commodities and consumer
products including toys, the statement said.

That would throw a lifeline to Vietnam’s export sector, which relies
heavily on the U.S. market and would effectively be priced out by a 46
percent tariff.

The draft implicitly references the U.S. demand that Hanoi reduce its role
as a transhipment hub for Chinese-produced products, which constitute 40
percent
<https://www.cnbc.com/2025/04/22/vietnam-clamps-down-on-fraud-on-us-exports-document-shows.html>
 of Vietnam’s imports.

Under the draft framework agreement, the U.S. and Vietnam will “establish
favorable rules of origin” of each other’s imports to reduce the
transhipment of Chinese products, but it provides no details. It also says
that Vietnam will address non-tariff barriers like intellectual property
enforcement.

Vietnam would also “provide preferential market access” for both
agricultural products including poultry, pork and beef as well as
unspecified industrial goods, according to the draft. Meanwhile, Hanoi is
poised to confirm a long-mooted $8 billion dollar purchase
<https://www.reuters.com/en/vietnam-airlines-finalise-order-50-boeing-737-max-jets-very-soon-executive-says-2025-06-02/#:~:text=Export%2Ddependent%20Vietnam%20is%20under,not%20yet%20finalised%20the%20deal.>
 of 50 Boeing aircraft and existing memoranda of understanding to purchase
$2.9 billion in U.S. agricultural products
<https://www.reuters.com/world/asia-pacific/vietnam-firms-sign-mous-buy-2-bln-us-farm-produce-2025-06-03/>,
the statement said.

The statement does not include a timeline for further trade talks, nor does
it include any China-specific language, as some China hawks in the U.S.
have been advocating.

The terms of the deal could have sweeping implications for how other
countries in Asia approach talks. Other countries in the region are
unlikely to accept any terms they view as inferior to Vietnam’s, said one
diplomat who is leading negotiations for a separate Asian country.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826
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