President Donald Trump announced on Wednesday a new trade agreement with Vietnam, imposing a 20% tariff on Vietnamese imports to the United States. In a Truth Social post, Trump stated the deal grants the U.S. tariff-free access to Vietnam’s markets. Additionally, Vietnam agreed to a 40% tariff on goods transshipped through Vietnam from other countries, such as China, to the U.S. This practice, known as transshipping, is often used to evade trade barriers.
President Trump via 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!
Ana Swanson, Damien Cave, Alexandra Stevenson, Alan Rappeport, and Tung Ngo for The New York Times:
Which products would fall under the higher tariff rate is unclear. It could refer to goods imported to the United States from Vietnam that actually originated in China. But it could also apply to Vietnamese products that use a certain amount of Chinese parts. The deal could include a lower tariff on goods that are made in Vietnam with fewer Chinese parts and materials, and a higher tariff rate for Vietnamese goods that contain many Chinese components.
Mr. Trump characterized the deal as Vietnam paying the tariffs even though they will be paid by U.S. importers.
The president added that as part of the agreement, Vietnam will open its market to American businesses, allowing them to export to Vietnam without any tariffs.
A statement from the Vietnamese government about the phone call said that the two countries had reached a “framework for a fair and balanced reciprocal trade agreement,” one that would give the United States “preferential market access” for American goods.
MacDailyNews Take: The 40% tariff on transshipped goods incentivizes Apple to ensure its Vietnam-based production is genuinely local and not a conduit for Chinese goods. This aligns with Apple’s ongoing strategy to diversify its supply chain away from China, where it currently faces a 145% cumulative tariff rate. Apple has already significantly increased production in Vietnam for iPads, Apple Watches, and AirPods, with Vietnam becoming a key hub for these products. The deal could push Apple to further invest in Vietnam’s manufacturing ecosystem, potentially reducing its over-reliance on China over time.
Of course, the 20% tariff on Vietnamese imports into the U.S. directly impacts Apple’s products manufactured in Vietnam, such as iPads, Apple Watches, AirPods, and some Mac products.
Apple would either have to absorb the 20% tariff on Vietnam-made goods, which would compress profit margins, or pass the costs to consumers. We expect Apple to mostly, if not totally, absorb the 20% tariff on Vietnam-made goods into the U.S., while, as always, working its supply chain to minimize the impact of U.S. import tariffs.
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So this is NOT GOOD for Apple and Apple shareholders (and lots of other American companies that manufacture in Vietnam.) Just for the record.
Having just returned from Vietnam, the idea of selling “Large Engine Vehicles” seems delusional. The motorbike rules the city and country roads and SUVs would clog their roads in a way that would make no sense. The car we saw alot of is an electric miniSUV called the VF3 made by Vinfast, the leading Vietnamese car manufacturer. I don’t see ICE powered large vehicle engines made in the US having any marketability in Vietnam. The motorbike is so tightly weaved into daily life.
I think we got hosed, although anything to marginalize China is good. But I hope that I’m wrong and that this is wildly successful for the US.
Remove all barriers against US companies if Vietnam wants access to the US marketplace.
Home Depot, Amazon, Costco, Ford, Caterpillar, Google, Microsoft, Facebook could all buy local companies and offer US products if it weren’t for regulatory restrictions against them.
If US products are not desired there then removing tariffs against US companies should be zero problem.
“The Terms are that Vietnam will pay the United States a 20% Tariff on any and all goods”
does Trump not understand how tariffs work, the US consumer will pay that tax when they purchase goods from Vietnam
here in Aust we will get those same goods 20% cheaper without the extra tax, cost of living in the US is going to get horrendous, hope you get a cost of living pay increase soon
U.S. blue-collar workers have recently experienced the largest real wage growth in nearly 60 years.
60 years.
The second-greatest period of growth since the late 1960s occurred during President Trump’s first term in the Oval Office (before Democrats and Chinese aliens in swing state inner cities packed unmonitored drop boxes with fraudulent ballots in order to install “Biden” in the White House, wasting 4 years). Real hourly earnings grew 1.3% from Jan. 20, 2017 to June 17 of that year.
MAGA. Still not tired of winning.
Thanks, Firsty, for two pieces of news in one comment that ABC/NBC/CBS/CNN/MSDNC/PBS/NPR/NYT/WaPo/Etc. will never report to their tiny, ever-shrinking audience of rubes.
So you’re proud of cherry picking the sugar high following dumpty’s. debt-ballooning short term tax cuts?
You should have seen by now that trickledown has done nothing to stop oligarchs from offshoring jobs, but it has created an unsustainable debt that you and your ilk REFUSE to pay down.
Tell us at what point the debt will matter to you? The dollar is plummeting in value. The bond markets are weak. US credit rating was lowered, making loans pricier. Trade is dropping, putting pressure on all jobs related to shipping and complex manufacturing and raising consumer costs at least 15-20% for Americans. (At least, those Americans who actually work 9-5). Not a single new factory has been created since dumpy47 trade wars started. and now, record deficits are promised along with an increase in debt limit. In simple kitchen table economics terms, the deadbeat dad is driving his family to bankruptcy, while buying a new Cadillac and telling the kids they don’t need to save for higher education, just get another credit card. Now let’s go golfing!
This is not fiscally sustainable. Apparently you just want to tell everyone how great your hero is as he drives the credit of America off a cliff.
A 20% tax on Americans who buy Vietnamese-made products accomplishes what exactly? It certainly won’t incentivize any multinational corporation to move any factories.
Magats should explain this exciting news, because it’s just another regressive tax to everyone who understands basic economics.
The trade deal benefits Americans by opening Vietnam’s market to U.S. goods, reducing the trade deficit, protecting domestic industries from unfair competition, and moderating tariff impacts on consumers. It also strengthens U.S. economic influence in the Indo-Pacific, supporting jobs and strategic interests.
Trump said he was seeking reciprocal tariffs. Obviously now that was a lie. If Vietnam is imposing no tariffs on US goods, then the US should impose no tariffs on Vietnamese made products. Almost everything Trump says is a lie. And I voted for him. I was sold on the “no more stupid wars”. Oh well, he may not do what he said he would, but he sure is good at using CAPS in tweets.
Wrong.
The U.S. trade deficit with Vietnam was $123.5 billion in 2024 ($136.6 billion in imports vs. $13.1 billion in exports.) The deal addresses this imbalance by increasing U.S. exports through Vietnam’s market opening and commitments to purchase U.S. goods, such as a potential $8 billion order for 50 Boeing aircraft and $2.9 billion in agricultural products. This will create even more jobs in American manufacturing and agriculture.
Wrong. You are citing only manufactured goods. Now post the actual trade balance when you include services the USA sells to Vietnam.
You should fact check harder.
Thank you for finally admitting that you can see the liar keeps lying.
The primary goal for this administration is grift, because the policies that they pursue are killing long term economic prosperity in order to enrich the campaign funders and friends.
They don’t even try to hide the corruption anymore.