Vietnam Reaches Trade Agreement with Trump Administration: Key Economic Measures Announced

Vietnam has reached a trade agreement with the Trump administration under which goods exported to the United States will face a 20% tariff, while goods rerouted through third countries will incur a 40% tariff. In contrast, U.S. exports to Vietnam will enjoy zero tariffs. In response to the economic challenges posed by these tariffs, the Hanoi government has proposed two major countermeasures.

On July 9, Phan Thi Thang, Vietnam's Deputy Minister of Industry and Trade, stated that the ministry is coordinating with major enterprises to develop responsive strategies. These include improving product quality to mitigate risks from U.S. tariffs and seeking to expand exports to other markets, thereby reducing dependence on the U.S.

Speaking at an investment conference in Hanoi, Phan emphasized that the tariffs provide an opportunity for Vietnam to enhance product quality and diversify its export markets. She noted that the primary targets for expanded exports are markets with which Vietnam has signed Free Trade Agreements (FTAs). “Vietnam has signed 16 FTAs and is working to expand its export markets to reduce reliance on the U.S.,” she said.

Vietnam’s GDP growth in the second quarter of this year reached 7.96%, up from 6.93% in the first quarter, but still below the full-year target of 8%. Prime Minister Pham Minh Chinh, in a separate conference on July 9, acknowledged that achieving this goal remains a significant challenge.