Trade Truce: **Trump** Strikes Deal with Vietnam

Agreement comes just ahead of looming tariff deadline.

Just ahead of a looming tariff deadline, former US President **Donald Trump** announced a trade agreement with Vietnam, marking the resolution of intense diplomatic discussions between the two nations.

Key Terms of the Deal

**Mr. Trump** declared the agreement via a Truth Social post on July 2nd, stating, “I just made a Trade Deal with Vietnam. Details to follow.”

This agreement is reportedly the third negotiated by **Trump** after deals with the UK and China, amid a rush by trading partners to finalize terms with the United States prior to a July 9th deadline.

Originally, **Trump** had imposed a 46% duty on Vietnamese imports as part of his reciprocal tariff policy introduced in early April but later reduced it to 10% to facilitate negotiations.

Vietnam’s Growing Trade with the US

In recent years, sales from the Southeast Asian nation to the U.S. have increased significantly, driven in part by manufacturers relocating their production from China.

Vietnam plays a crucial role as a supplier of textiles and sportswear, hosting factories for major corporations like Nike, Gap, and Lululemon Athletica. According to the U.S. Census Bureau, Vietnam ranked as the sixth-largest source of U.S. imports in 2024, shipping nearly $137 billion worth of goods.

Negotiation Highlights

The trade agreement follows weeks of negotiations where the U.S. urged Vietnam to strengthen its measures against trade fraud, enhance enforcement against the transshipment of Chinese goods, and eliminate non-tariff barriers.

Vietnam reportedly offered to eliminate all tariffs and pledged to increase its purchases of American products. Vietnamese officials visited the U.S. to garner support and finalize deals, including agreements for $3 billion worth of agricultural commodities.

According to the U.S. Trade Representative, two-way trade in goods between the United States and Vietnam totaled $127.6 billion in 2022 alone, making it an important economic partnership. USTR.gov

Shifting Manufacturing Landscape

As tensions between the U.S. and China escalated over the past decade, brands have increasingly moved their manufacturing operations to Vietnam.

This shift contributed to a substantial trade imbalance, positioning Vietnam as a key target for **Trump’s** tariff policies. In 2024, Vietnam’s trade surplus with the U.S. was the third-largest globally, trailing only China and Mexico.

Shipments in May saw a 35% increase as companies expedited the movement of goods onto vessels to avoid the looming deadline.