President Trump has announced that the U.S. and Vietnam have agreed to a trade deal following his conversation with To Lam, the General Secretary of Vietnam’s Communist Party. As part of the deal, the U.S. will have open market access to the country, which means a “ZERO Tariff” rate for U.S. imports, said Trump.
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In return, Vietnamese goods imports to the U.S. will be charged at a baseline rate of 20% while products that experience transshipment will incur a 40% tariff.
Trump Tackles Transshipped Products in U.S.-Vietnam Trade Deal
Transshipment occurs when a product is made in Country A and is then shipped to Country B before arriving in Country C in an attempt to escape duties. Trump likely requested a 40% tariff on transshipped items in order to stop the flow of Chinese goods into Vietnam and then the U.S.
Trump added that he believes U.S. SUVs will do well in Vietnam and that it was an “absolute pleasure” dealing with Lam.
In 2024, the U.S. exported $13.1 billion of goods to Vietnam and imported $136.6 billion of goods from the country, resulting in a large goods trade deficit of $123.5 billion.
The VanEck Vietnam ETF (VNM) received a bump on the trade deal but has since given up those gains.
