Trump’s Vietnam Deal Imposes 20% Tariff- Trade War Tensions Flare

According to the Trump, the Southeast Asian nation has agreed to pay the US a 20% tariff on all goods entering American territory and a higher 40% tariff on any goods that are shipped through other countries before reaching the U.S.

Trump revealed the agreement on Twitter and other social media handles, describing it as a “Great Deal of Cooperation” between the United States and Vietnam. The President also said this pact will definitely transform trade ties between the two nations, aiming for a healthier system.

Source: The Kobeissi Letter

The country will impose 0% tariffs in return on United States products.

As the President’s tariff period nears its end on July 9, all eyes are fixed on what might happen next. Now, President Donald Trump has declared a major agreement with the Socialist Republic of Vietnam. In an announcement, he declared a new trade pact and said the country will, in return, impose 0% tariffs on U.S. products sold in its market, just as existing tariff policies are approaching their expiration.

In exchange, Vietnam will allow American products to enter its market without any tariffs, so U.S. goods can be sold there more easily. Trump emphasized that the “Great Deal” will especially help Americans to make SUVs and other big vehicles, calling them a “wonderful addition” to local product lines.

The country will do something they have never done before, according to the President. He said that he spoke personally to Lam (General Secretary of the Communist Party of Vietnam) to finalize these terms. He emphasized that Vietnamese leaders have agreed to opening up their entire market to United States products at zero tariffs - something never done before, which equals a significant victory for American trade interests.

U.S. and Vietnam Trade Pact - Big Win for American Manufacturers

According to the Trump, this agreement is a big win for American manufacturers and exporters, especially as the current tariff protections he imposed during his presidency are winding down.

What This Trade Pact Could Lead To?

1. More American products in the country
The agreement will open up opportunities for Americans to enter the Vietnamese market because there would be no extra tariff. That means U.S. businesses might get a bigger piece of the market.

2. Higher costs for Vietnamese exports
As per the pact, the country would pay a 20% tariff on its goods going to the U.S. and 40% on goods sent through other countries. Vietnamese products could become more expensive for American buyers. This might protect U.S. factories from cheaper imports and also raise prices for shoppers in America.

3. Closing back-door routes for Chinese products
The President says the 40% tariff will stop Chinese goods from sneaking into the U.S. by being shipped through the country first. If that works, it might close a loophole that some companies have used to dodge existing tariffs.

However, there has been no immediate confirmation of these claims from either the U.S. government or Vietnam’s official sources. Trade experts have urged caution, pointing out that agreements of this scale typically involve lengthy negotiations and require formal documentation, which has not yet been made public. Some critics have even raised doubts about whether the Southeast Asian nation would agree to such high tariffs on its own exports, while fully opening its markets to U.S. goods for free.

How might this trade pact affect the upcoming Japan meeting on July 9?

The Trump has praised a new trade agreement with Vietnam as the tariff pause heads toward its July 9 end date. He is also signaling a tough line with Japan, calling them “spoiled” and accusing them of refusing to buy American rice and cars.

Now in this scenario some questions are also being raised in people’s minds - Could this Vietnam pact put more pressure on Japan to accept Trump’s demands? Or will Japan feel forced to agree quickly before the President ends the tariff pause?

Trump has cast doubt on a deal with Japan, stating he may not extend tariff relief and warned of higher levies on Japanese exports.

The U.S. and Vietnam agreement has left Japanese negotiators confused, even as Japan remains a key U.S. security partner in East Asia. The deadline is very close, and if no agreement is reached before it, there is a high chance that once again Japan’s goods will face steep tariffs, making trade problems worse and adding stress for businesses and shoppers in both countries.

Final Thought

The Trump is presenting this as a powerful step to protect American industry and expand export opportunities in Southeast Asia. As the expiration of his earlier tariffs approaches, he seems determined to keep the focus on strong trade enforcement and new agreements that he claims will put American workers and companies first.