Donald Trump announces 20% tariff in trade agreement with Vietnam
The deal comes less than a week before Trump's self-imposed July 9 deadline for steeper tariffs on US trade partners to take effect if agreements are not reached.
Shares in clothing companies and sport equipment manufacturers, such as Nike, which have a large footprint in Vietnam, initially rose on the news. But they later declined sharply after the president released details of the deal, including the continued tariffs, which were higher than expected.
• Tala puts US expansion on ice in response to US tariffs
If confirmed, the terms of the agreement will significantly increase the price of shoes and clothing that Vietnam exports to the US, but Hanoi escapes the threat of the more severe 46 per cent tariff threatened by Trump in April.
'It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam after speaking with To Lam, the Highly Respected General Secretary of the Communist Party of Vietnam,' Trump wrote on his Truth Social platform.
He said that under the 'Great Deal of Cooperation', imports of Vietnamese goods will face a 20 per cent US tariff, while goods that pass through Vietnam to circumvent steeper trade barriers — so-called trans-shipments — will incur a 40 per cent tariff.
• Trump piles on the tariffs but UK escapes the worst
Shortly after the trade announcement, Vietnam Airlines was reported to be ready to acquire 50 of Boeing's 737 Max aircraft manufactured in 2023, with the deal valued at $8 billion, according to Politico, the news website.
Trump's trade adviser, Peter Navarro, has called Vietnam a 'colony of China', saying that one third of Vietnamese products are in fact relabelled Chinese goods.
The president said of the trade agreement that 'in return, Vietnam will do something they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade.
'In other words, they will 'OPEN THEIR MARKET TO THE UNITED STATES,' meaning that we will be able to sell our product into Vietnam at ZERO Tariff.'
• Is it a good time to invest in Vietnam Enterprise Investments Ltd?
Trump said he believed that US-made SUVs, 'which do so well in the United States, will be a wonderful addition to the various product lines within Vietnam'.
In a government statement, Vietnam confirmed that negotiating teams had come to an agreement to address the reciprocal tariff issue, but did not detail any terms.
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