Trump's Preliminary Trade Agreement with Vietnam Offers Tariff Adjustments

On July 2, 2025, President Trump announced a preliminary trade agreement with Vietnam aimed at modifying existing tariffs on Vietnamese products. The deal involves rolling back some of the heavy tariffs previously imposed in exchange for Vietnam's commitment to increase its market accessibility for American goods, which might lead to a significant shift in U.S.-Vietnam trade dynamics.

The agreement sets a standard 20 percent tariff on all imports from Vietnam and introduces a steep 40 percent tariff on items that are flagged as "transshipped"—a measure designed to deter imports that are merely routed through Vietnam to circumvent U.S. tariffs on China. The specifics of which products will be subjected to these increased rates remain ambiguous; they could target goods produced in Vietnam but containing substantial Chinese components. Howard Lutnick, Secretary of Commerce, clarified the approach, stating, "If another country sells their content through products exported by Vietnam to us — they’ll get hit with a 40 percent tariff." As the trade agreements evolve, it remains to be seen how these new provisions will impact the intricate global supply lines linking Vietnam and Chinese manufacturers.