President Trump secures unprecedented trade deal with Vietnam, giving American businesses total access to Vietnamese markets with zero tariffs while imposing a strategic 20% tariff on Vietnamese imports.
Key Takeaways
- Vietnam will pay a 20% tariff on goods entering the US and a 40% tariff on transshipped goods to prevent Chinese manufacturers from bypassing tariffs.
- Vietnam has agreed to impose zero tariffs on American products, giving US businesses complete access to Vietnamese markets.
- The agreement replaces a previously planned 46% tariff on Vietnamese imports that was temporarily paused for 90 days.
- Vietnam is a critical manufacturing hub for the US, accounting for approximately 25% of shoe production, with 274 million pairs imported in 2024.
- The deal follows direct negotiations between President Trump and Vietnamese General Secretary To Lam.
America First: Strategic Tariffs with Exceptional Market Access
President Trump has negotiated a groundbreaking trade agreement with Vietnam that prioritizes American economic interests while addressing unfair trade practices. The deal establishes a 20% tariff on Vietnamese goods entering the United States and a steeper 40% tariff on goods that are merely routed through Vietnam. This strategic tariff structure specifically targets the practice of transshipping, where Chinese manufacturers attempt to circumvent existing tariffs by routing their products through Vietnam and falsely labeling them as “Made in Vietnam.”
The most significant win for American businesses is Vietnam’s concession to allow zero tariffs on US products entering their market. “Vietnam will pay the United States a 20 percent tariff on any and all goods sent into our territory, and a 40 percent tariff on a Transshipping,” said U.S. President Donald Trump.
The details within the trade agreement are unique. President Donald Trump has announced a trade agreement between the USA and Vietnam. Interestingly Vietnam will face a 20% tariff rate (baseline) and a 40% tariff rate on transnational shipping.
The 40% transnational shipping… https://t.co/KNaLz4FUp7
— TheLastRefuge (@TheLastRefuge2) July 2, 2025
Vietnam’s Critical Role in American Supply Chains
Vietnam has become an essential manufacturing hub for American businesses, particularly in the footwear industry. The Southeast Asian nation produces approximately 25% of all shoes, with a strong focus on athletic footwear. In 2024 alone, the United States imported 274 million pairs of shoes from Vietnam, representing over half of all athletic footwear imports by both volume and value. This manufacturing relationship has made the trade negotiations particularly significant for American retailers and consumers.
“Vietnam is essential to the U.S. footwear supply chain, especially for athletic shoes. In 2024, we imported 274 million pairs from Vietnam, accounting for over half of all athletic footwear imports by volume and value,” said Matt Priest.
Industry experts have noted that while the new 20% tariff is higher than the temporary 10% rate previously in place, it represents a significant improvement over the initially proposed 46% tariff. This more balanced approach provides certainty for businesses while still protecting American interests. The Footwear Distributors and Retailers of America (FDRA) has expressed concerns about potential price increases for consumers, noting that duties on children’s shoes have already increased nearly 300% year-over-year under existing tariff structures.
Combating Chinese Transshipment Abuses
A key focus of the trade agreement is preventing Chinese manufacturers from exploiting Vietnam as a backdoor to the American market. US officials have documented cases where Chinese goods are routed through Vietnam, undergo minimal processing, and then are shipped to the United States with “Made in Vietnam” labels to avoid Chinese tariffs. The 40% tariff on transshipped goods serves as a strong deterrent against this deceptive practice that undermines fair trade and harms American businesses.
Vietnam’s government has responded to these concerns by holding emergency meetings to address intellectual property theft and transshipment abuses. The US-Vietnam trade relationship is substantial, with total goods trade estimated at $149.6 billion in 2024, though the US currently faces a significant trade deficit of $123.5 billion. This new agreement aims to rebalance this relationship while ensuring Vietnam isn’t used as a proxy for Chinese manufacturing to circumvent tariffs.
“With respect to Vietnam — the second largest supplier for footwear, apparel, and accessories sold into the U.S. market — we look forward to learning the details related to today’s news so that we, together with our members, can evaluate how well it will provide relief and certainty,” said Steve Lamar.
America’s Expanding Global Trade Strategy
The Vietnam agreement is part of President Trump’s broader strategy to restructure America’s global trade relationships. The administration has already finalized a trade deal with the United Kingdom and is actively negotiating with 14 other countries, including major economic powers like India, Japan, and Mexico. Trump has hinted at a potentially “very big” deal with India, which is another significant footwear production hub, indicating that his administration is working systematically to ensure fair trade practices across all major manufacturing centers.
The Vietnam deal was reached after direct discussions between President Trump and To Lam, General Secretary of the Communist Party of Vietnam. This personal diplomacy approach has proven effective in securing favorable terms for American businesses while maintaining productive relationships with trading partners. Vietnamese Prime Minister Pham Minh Chinh had previously expressed optimism about reaching an agreement before the 90-day tariff pause deadline expires early next month, demonstrating Vietnam’s recognition of the importance of maintaining access to the American market.
