Trump made a major announcement: The US-Vietnam trade agreement has been reached, and Vietnamese goods face a new 20% tariff policy!
2025-07-03 09:16:07
At a time when the global trade landscape is changing rapidly, US President Trump has once again dropped a heavy "trade bomb". On Wednesday (July 2), Trump announced through his social platform Truth Social that the United States and the Socialist Republic of Vietnam have officially reached a new trade agreement. This agreement not only sets a 20% tariff threshold for Vietnamese exports, but also imposes tariffs of up to 40% on third-country goods transiting through Vietnam. At the same time, Vietnam's commitment to a zero-tariff policy for US products has attracted widespread attention from the global market and public opinion.
Trump excitedly announced the trade deal after a phone call with To Lin, general secretary of the Communist Party of Vietnam. He said the deal would further balance trade relations between the United States and Vietnam and protect American domestic industries from the impact of low-priced imported goods. According to the agreement, the United States will impose a 20% tariff on all goods exported from Vietnam, and for those goods that are mainly produced in third countries (such as China) and transited through Vietnam, the tariff will be as high as 40%. The introduction of this policy is clearly another effort by the Trump administration to continue its "America First" concept, aimed at curbing the practice of circumventing tariffs through Vietnam.
It is worth noting that as early as April this year, the United States announced plans to impose tariffs of up to 46% on Vietnamese goods. Now the new agreement has reduced the tariff level to 20%, which seems to have eased somewhat, but it still puts a lot of pressure on Vietnamese exporters. Especially for those multinational companies that rely on Vietnam as a production and transshipment base, this is undoubtedly a sharp increase in costs.
Faced with the tariff pressure from the United States, the Vietnamese government has shown a gesture of compromise and cooperation. According to an official statement from Vietnam, the two countries reached a joint statement on a trade framework, in which Vietnam pledged to implement a zero tariff policy on US products in exchange for more favorable market access conditions. Specifically, Vietnam will provide a more relaxed market access policy for US agricultural products (including poultry, pork and beef) and some industrial products. In addition, Vietnam has also confirmed a procurement plan worth US$8 billion to purchase 50 aircraft from Boeing of the United States, and continue to implement the previous memorandum of understanding on the purchase of US agricultural products worth US$2.9 billion.
These measures have undoubtedly given a shot in the arm to the US agricultural and aviation industries. As soon as the news came out, the US stock market responded quickly, and the share prices of several US clothing and sports brand manufacturers, including Nike, Under Armour and North Face's parent company VF Corp, rose. Obviously, the market has optimistic expectations for Vietnam's move to open up US products.
Although the content of the agreement seems clear, the clause on "transit goods" has raised many questions. The agreement stipulates that the United States will impose a 40% tariff on goods that are mainly produced in third countries and finally processed in Vietnam. However, the concept of "transit" is often controversial in trade enforcement. How to define which goods are "transit"? How to implement this policy in practice? These questions have cast a shadow on the implementation of the agreement.
Business consultant Dan Martin commented on LinkedIn that "In trade enforcement, 'transshipment' is a vague and often politicized term. How it is defined and how it is applied in practice will determine the future of US-Vietnam trade relations." This view expresses the concerns of many industry insiders. If the United States is too strict in the enforcement process, it may cause heavy damage to Vietnam's export industry and even affect the stability of the global supply chain.
During the negotiation of the agreement, Vietnam also put forward its own demands. According to the Vietnamese government, General Secretary Su Lin explicitly asked the United States to recognize Vietnam as a market economy country and lift restrictions on the export of high-tech products to Vietnam during a call with Trump. This request reflects Vietnam's ambition to seek a greater voice in the global economy. For a long time, Vietnam has been listed as a "non-market economy country" by the United States, which means that its export products face higher tariff barriers in anti-dumping investigations. Now, Vietnam hopes to take this opportunity to change this situation and strive to gain more development space in the high-tech field.
However, neither the White House nor the Vietnamese Ministry of Trade has responded to these demands, which adds more uncertainty to the subsequent implementation of the agreement.
Since Trump imposed tariffs on hundreds of billions of dollars of Chinese goods during his presidency from 2017 to 2021, Vietnam has rapidly emerged as an important trading partner of the United States. Many multinational companies have moved their production bases to Vietnam to circumvent tariffs on China, resulting in a surge in Vietnam's exports to the United States. However, this growth is almost one-way, with the United States' imports from Vietnam increasing significantly, while Vietnam's imports from the United States are relatively limited. This trade imbalance is the background for Trump's wielding of the tariff stick this time.
Through the new trade agreement, Trump obviously hopes to further tighten trade policies toward Vietnam and prevent it from becoming a "back door" to circumvent tariffs on China. However, this policy may also trigger a chain reaction. As an important hub for global manufacturing, Vietnam's rising costs may push up global commodity prices and further increase inflationary pressure.
In general, the US-Vietnam trade agreement announced by Trump is a complex game, which not only reflects the determination of the United States to protect its domestic industries, but also shows Vietnam's flexible response in global trade. The 20% tariff and 40% transshipment tariff will undoubtedly pose a challenge to Vietnamese exporters, but the benefits Vietnam has gained through zero tariffs and market opening cannot be ignored. However, the ambiguity of the transshipment clause in the agreement and Vietnam's demand for market economy status still leave many suspense for future implementation and negotiations. This move may be seen as a continuation of the United States' protectionist policies, triggering market concerns about global economic uncertainty. As a safe-haven asset, gold prices are usually boosted when trade tensions or geopolitical risks rise. If the market believes that this agreement may lead to supply chain disruptions or rising costs, investors may increase their gold allocation, thereby pushing up gold prices in the short term.
For the global market, the impact of this agreement goes far beyond the United States and Vietnam. It may reshape the global supply chain and affect the production and trade patterns of everything from clothing to electronics. At a time when trade protectionism is on the rise and globalization is facing challenges, this agreement has undoubtedly added more uncertainty to the future international trade pattern. In the future, how the United States and Vietnam implement the agreement and resolve their differences will become the focus of global attention.
At 09:15 Beijing time, spot gold was trading at $3,345.44 per ounce.
Trump's "New Trade Policy": Tariffs Are Targeting Vietnam
Trump excitedly announced the trade deal after a phone call with To Lin, general secretary of the Communist Party of Vietnam. He said the deal would further balance trade relations between the United States and Vietnam and protect American domestic industries from the impact of low-priced imported goods. According to the agreement, the United States will impose a 20% tariff on all goods exported from Vietnam, and for those goods that are mainly produced in third countries (such as China) and transited through Vietnam, the tariff will be as high as 40%. The introduction of this policy is clearly another effort by the Trump administration to continue its "America First" concept, aimed at curbing the practice of circumventing tariffs through Vietnam.
It is worth noting that as early as April this year, the United States announced plans to impose tariffs of up to 46% on Vietnamese goods. Now the new agreement has reduced the tariff level to 20%, which seems to have eased somewhat, but it still puts a lot of pressure on Vietnamese exporters. Especially for those multinational companies that rely on Vietnam as a production and transshipment base, this is undoubtedly a sharp increase in costs.
Vietnam’s response: zero tariffs and market opening
Faced with the tariff pressure from the United States, the Vietnamese government has shown a gesture of compromise and cooperation. According to an official statement from Vietnam, the two countries reached a joint statement on a trade framework, in which Vietnam pledged to implement a zero tariff policy on US products in exchange for more favorable market access conditions. Specifically, Vietnam will provide a more relaxed market access policy for US agricultural products (including poultry, pork and beef) and some industrial products. In addition, Vietnam has also confirmed a procurement plan worth US$8 billion to purchase 50 aircraft from Boeing of the United States, and continue to implement the previous memorandum of understanding on the purchase of US agricultural products worth US$2.9 billion.
These measures have undoubtedly given a shot in the arm to the US agricultural and aviation industries. As soon as the news came out, the US stock market responded quickly, and the share prices of several US clothing and sports brand manufacturers, including Nike, Under Armour and North Face's parent company VF Corp, rose. Obviously, the market has optimistic expectations for Vietnam's move to open up US products.
The “gray area” of transshipment clauses: challenges and controversies coexist
Although the content of the agreement seems clear, the clause on "transit goods" has raised many questions. The agreement stipulates that the United States will impose a 40% tariff on goods that are mainly produced in third countries and finally processed in Vietnam. However, the concept of "transit" is often controversial in trade enforcement. How to define which goods are "transit"? How to implement this policy in practice? These questions have cast a shadow on the implementation of the agreement.
Business consultant Dan Martin commented on LinkedIn that "In trade enforcement, 'transshipment' is a vague and often politicized term. How it is defined and how it is applied in practice will determine the future of US-Vietnam trade relations." This view expresses the concerns of many industry insiders. If the United States is too strict in the enforcement process, it may cause heavy damage to Vietnam's export industry and even affect the stability of the global supply chain.
Vietnam’s demands: market economy status and high-tech exports
During the negotiation of the agreement, Vietnam also put forward its own demands. According to the Vietnamese government, General Secretary Su Lin explicitly asked the United States to recognize Vietnam as a market economy country and lift restrictions on the export of high-tech products to Vietnam during a call with Trump. This request reflects Vietnam's ambition to seek a greater voice in the global economy. For a long time, Vietnam has been listed as a "non-market economy country" by the United States, which means that its export products face higher tariff barriers in anti-dumping investigations. Now, Vietnam hopes to take this opportunity to change this situation and strive to gain more development space in the high-tech field.
However, neither the White House nor the Vietnamese Ministry of Trade has responded to these demands, which adds more uncertainty to the subsequent implementation of the agreement.
Background of US-Vietnam trade: from "China substitution" to "new tariff war"
Since Trump imposed tariffs on hundreds of billions of dollars of Chinese goods during his presidency from 2017 to 2021, Vietnam has rapidly emerged as an important trading partner of the United States. Many multinational companies have moved their production bases to Vietnam to circumvent tariffs on China, resulting in a surge in Vietnam's exports to the United States. However, this growth is almost one-way, with the United States' imports from Vietnam increasing significantly, while Vietnam's imports from the United States are relatively limited. This trade imbalance is the background for Trump's wielding of the tariff stick this time.
Through the new trade agreement, Trump obviously hopes to further tighten trade policies toward Vietnam and prevent it from becoming a "back door" to circumvent tariffs on China. However, this policy may also trigger a chain reaction. As an important hub for global manufacturing, Vietnam's rising costs may push up global commodity prices and further increase inflationary pressure.
Summary: Opportunities and Challenges of the US-Vietnam Trade Agreement
In general, the US-Vietnam trade agreement announced by Trump is a complex game, which not only reflects the determination of the United States to protect its domestic industries, but also shows Vietnam's flexible response in global trade. The 20% tariff and 40% transshipment tariff will undoubtedly pose a challenge to Vietnamese exporters, but the benefits Vietnam has gained through zero tariffs and market opening cannot be ignored. However, the ambiguity of the transshipment clause in the agreement and Vietnam's demand for market economy status still leave many suspense for future implementation and negotiations. This move may be seen as a continuation of the United States' protectionist policies, triggering market concerns about global economic uncertainty. As a safe-haven asset, gold prices are usually boosted when trade tensions or geopolitical risks rise. If the market believes that this agreement may lead to supply chain disruptions or rising costs, investors may increase their gold allocation, thereby pushing up gold prices in the short term.
For the global market, the impact of this agreement goes far beyond the United States and Vietnam. It may reshape the global supply chain and affect the production and trade patterns of everything from clothing to electronics. At a time when trade protectionism is on the rise and globalization is facing challenges, this agreement has undoubtedly added more uncertainty to the future international trade pattern. In the future, how the United States and Vietnam implement the agreement and resolve their differences will become the focus of global attention.
At 09:15 Beijing time, spot gold was trading at $3,345.44 per ounce.
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