U.S. President Donald Trump has announced a reduced 20% tariff on many Vietnamese exports, down from a previously planned 46%, in what he described as a new trade framework with Hanoi.

Trump revealed the measure on Wednesday via his Truth Social platform following a call with Vietnamese President To Lam, calling it a “great honour” to reach a deal. The agreement comes ahead of a 9 July deadline for sweeping tariff hikes on imports from dozens of countries.

Under the revised terms, goods shipped directly from Vietnam to the U.S. would face a 20% tariff, while trans-shipped goods—products manufactured in third countries, notably China, and relabelled in Vietnam—would incur a 40% tariff. Vietnam, in turn, agreed to allow duty-free access for certain U.S. goods, including large-engine vehicles.

The Vietnamese government welcomed the agreement but did not confirm specific tariff figures. In a statement, Hanoi said it would provide preferential access to U.S. products and raised longstanding requests, including recognition as a market economy and the removal of restrictions on high-tech imports.

Trump’s administration had threatened significantly higher duties in a move aimed at correcting trade imbalances and curbing trans-shipment practices. U.S. imports from Vietnam surged nearly threefold from under $50 billion in 2018 to $137 billion in 2024, as companies shifted supply chains away from China. In contrast, U.S. exports to Vietnam rose only modestly, reaching more than $13 billion last year.

The deal is a political win for Trump, whose broader tariff strategy has met resistance from allies and trading partners. Similar limited-scope agreements were reached with the UK and China, while negotiations with Japan have reportedly stalled.

Trade adviser Dan Martin of Dezan Shira & Associates said enforcement of trans-shipment rules remains vague and politically sensitive. “How it's defined and applied in practice will shape the future of U.S.-Vietnam trade relations,” he said.

Vietnam's dependence on the U.S. as an export market—its largest—has grown amid deepening economic and strategic ties, which both countries view as a hedge against China’s regional influence. Analysts warned that imposing the originally planned 46% tariff could have damaged bilateral trust and weakened security cooperation.

Shares of major U.S. retailers and apparel companies with Vietnamese supply chains, including Nike, Under Armour and VF Corp, rose following the tariff announcement.

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