President Trump announces trade deal with Vietnam allowing duty-free entry for US goods

President Donald Trump announced a trade deal with Vietnam that allows U.S. goods to enter the country duty-free, while Vietnamese exports to the U.S. face a 20% levy. Trump called it a 'Great Deal of Cooperation' on his Truth Social platform.

In April, Trump imposed a 46% tax on Vietnamese imports as part of reciprocal tariffs. The pause on these tariffs expires soon, with Vietnam being the only country so far to reach a trade agreement with the U.S.

Experts believe that imposing such agreements on bigger trading partners like the EU and Japan may be challenging. The U.S. had a $122 billion trade deficit with Vietnam last year, the third-largest after China and Mexico.

Trump also announced a 40% tax on 'transshipping' goods passing through Vietnam to avoid U.S. tariffs. Enforcement of this crackdown is seen as complex.

Vietnam's approval of a $1.5 billion Trump Organization project for a golf resort near Hanoi in May highlights the country's growing ties with the U.S. and efforts to counter China's influence.

In 2023, Vietnam hosted both President Joe Biden and Chinese leader Xi Jinping on state visits, leading to an upgrade in diplomatic status to a comprehensive strategic partner.