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| President Trump announces new trade deal with Vietnam. |
The U.S.-Vietnam trade deal, announced on July 2, 2025, builds on a 2001 Bilateral Trade Agreement that reduced tariffs from 40% to 3% for Vietnamese goods, a shift driven by Vietnam's economic reforms and its strategic pivot away from heavy reliance on China, with trade volumes jumping from $1.5 billion to over $111 billion by 2020.
The newly announced U.S.-Vietnam trade agreement trade deal has some political pundits calling it a strategic geopolitical move that recalibrates the entire Indo-Pacific balance.
Tariff arrangement:
- 20% fixed tariffs on all Vietnamese exports to the U.S.,
- 40% on transshipped goods (mostly Chinese in disguise), and
- Zero tariffs for U.S. exports into Vietnam.
📈 Economic Breakdown:
•Zero-tariff gives the United States access to a rapidly growing market of over 100 million people with rising consumption, which means significant expansion for U.S. manufacturing, agriculture, and automotive sectors.
•Imposing a 20% tariff floor on Vietnamese exports ensures domestic production insulation, forcing Vietnam to pivot toward value-added U.S. goods and services.
•The 40% tariff on transshipped goods is a direct assault on China’s backdoor laundering of exports through Vietnam — a strategy that helped to assert China’s trade footprint in South Asia for over a decade.
Implications for China's influence in South East Asia
What makes this deal historic isn’t the tariffs — it’s the implicit containment mechanism:
- Forced Supply Chain Realignment — Vietnamese exporters will now de-risk from Chinese suppliers to avoid transshipping penalties.
- Strategic Loyalty Swap — This binds Vietnam’s economic fate closer to Washington than to Beijing.
- Alliance Fortification — The U.S. now holds leverage over Vietnamese markets, while Vietnam gains sovereignty from China’s suffocating economic grip.
- Vietnam is China’s largest export workaround. That ends now.
- U.S. companies gain first-mover advantage in emerging markets with high GDP growth.
- China’s Belt & Road foothold weakens, while U.S. regional leadership is reasserted through tariff engineering and economic statagem.
On his Truth Social social media platform said the trade agreement was "a Great Deal of Cooperation between our two Countries.'' Here's a screenshot of his announcement:
In April, Trump announced a 46% tax on Vietnamese imports — one of his so-called reciprocal tariffs targeting dozens of countries with which the United States runs trade deficits. Trump promptly suspended the reciprocal tariffs for 90 days to allow for negotiations like the one with Vietnam. The pause expires Tuesday, but so far the Trump administration has reached a trade agreement with only one of those countries — the United Kingdom.
The United States last year (2024) ran a $122 billion trade deficit with Vietnam. That was the third-biggest U.S. trade gap — the difference between the goods and services it buys from other countries and those it sells them — behind the ones with China and Mexico.
