Trump says US has reached trade deal with Vietnam as deadline looms for deals
President Trump on Wednesday said he had reached a trade deal with Vietnam, one week ahead of a July 9 deadline for tariffs to snap back to higher levels for US partners.
Trump said Vietnam’s goods imported to the US would face a 20% tariff, lower than the 46% tariff he had levied as part of his “Liberation Day” plans but higher than the blanket 10% tariff currently in effect. He also said Vietnamese goods would face a higher 40% tariff “on any transshipping” — when goods shipped from Vietnam originate from another country, like China.
Trump said that US goods exported to Vietnam would not face a tariff.
“In other words, they will ‘OPEN THEIR MARKET TO THE UNITED STATES,'” Trump wrote on Truth Social.
The deal would be the second the US has struck with a trade partner since Trump paused those sky-high “Liberation Day” duties, in addition to a pact with the United Kingdom. The US has also agreed with China on a framework to move toward a larger trade deal.
Trump’s July 9 deadline has come back in focus in recent weeks as more countries struggle to get over the hump. Trump earlier this week said negotiations with Japan had soured, saying he would force Japan to accept higher tariffs of “30%, 35%, or whatever the number is that we determine.” Notably, that proposal is higher than the 24% “Liberation Day” level.
“I’m not sure we’re going to make a deal,” Trump said. “I doubt it with Japan. They’re very tough. You have to understand, they’re very spoiled.”
With Japan as his jumping-off point, Trump renewed threats that he may stick to his self-imposed July 9 deadline for making trade deals and issue new tariff levels to trading partners, forgoing another pause to “Liberation Day” duties.
“I’ll be writing letters to a lot of countries,” he said.
Meanwhile, the European Union has signaled it was willing to accept a 10% universal tariff on many of its exports but is seeking exemptions for pharmaceuticals, alcohol, semiconductors, and commercial aircraft as part of a trade deal.
On the North American front, Canada has scrapped its digital services tax that was set to affect large US technology companies. The White House said trade talks between the two countries had resumed after Trump threatened to cut off trade talks.
Here are the latest updates as the policy reverberates around the world.
LIVE1312 updates
US to impose 20% tariff on goods from Vietnam, 40% rate on transshipments
President Trump followed up his previous announcement of a trade deal with Vietnam with some additional details on social media.
“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 posted on Truth Social.
Trump wrote that the two sides agreed to a 20% tariff rate on all goods sent from Vietnam to the US and a 40% tariff rate on transshipment — essentially, when goods from China or other countries are routed through Vietnam. Tariffs on goods from the country were previously set to return to 46% on July 9.
Vietnam also lowered tariffs on US goods to zero, Trump said, and is lowering trade barriers. The president suggested US automakers could introduce more SUVs to the Southeast Asian country.
“In return, Vietnam will do something that they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade,” Trump wrote. “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.”
How the US trades with Vietnam, by the numbers
President Trump had targeted Vietnam with some of the highest tariffs of any country on his April “Liberation Day.” That’s at least partly because he and top advisers have made Vietnam an example of a country that is allegedly “ripping off” the US.
Vietnam has become the US’s 10th-largest trade partner, according to US Census data. And it is the seventh-largest source of imports, sending goods worth over $130 billion. It contains factories for some of the biggest US-based apparel makers, including Nike (NKE) and Lululemon (LULU).
Vietnam became a destination for companies looking to diversify manufacturing as US-China tensions escalated over the past decade. Vietnam’s trade surplus with the US ballooned to over $123 billion last year.
This year’s US trade deficit with Vietnam stood over $50 billion through just April as companies raced to move more operations out of China.
US wants Vietnam to pay higher tariff based on foreign content
The US and Vietnam are said to be very close to a establishing a trade framework that will see goods given a scaled range of tariffs depending on the percentage of foreign content, according to people familiar with the talks.
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While we don’t yet know the details of the deal, Vietnam had been seeking to secure tariffs in the range of 20% to 25%, below Trump’s “Liberation Day” rate of 46% for goods from the country, according to a Bloomberg report.
The US had been looking to stop the flow of goods from China that had been rerouted through Vietnam to circumvent tariffs. Vietnam had offered to remove all tariffs on US goods and step up trade enforcement, according to people familiar with the talks.
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Bloomberg News reports:
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They tried Made in the USA. It was too expensive for their customers.
For many companies, the process from manufacture to sales has always started in China. When Plufl co-founders, Yuki Kinsohita and Noah Sliverman, began making dog beds for humans and pitched their prototype to Shark Tank in 2022, they envisioned making their plush, memory foam beds in China and selling them at retail in the US for $299.
Mark Cuban and Lori Greiner both invested $200,000 for a 20% share in the business, which went on to make over $1 million in sales in 2023, via Amazon and on their company website.
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Italy could lose $23.6B in exports, 118,000 jobs with US tariffs: Industry head
The risk that tariffs pose to the global economy have never been more real and now for Italy the macroeconomic pressures that President Trump’s tariffs bring are very concerning, with the head of the main Italian lobby saying on Wednesday that Italy risks losing around $23.6 billion in exports and 118,000 jobs if the US imposes tariffs of 10%.
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Trump’s 35% tariff threat feeds Japan’s worst-case scenario fear
For several months, the back and forth between the US and Japan has been an ongoing concern as the two parties attempt to reach a trade deal and avoid skyrocketing tariffs.
Now Trump has threatened Japan with tariffs of up to 35%. This is a worst-case scenario for Japan and has started to raise doubts over Tokyo’s tactics in trade talks.
“Japan should be forced to pay 30% or 35% or whatever number we determine, because we have a very big trade deficit with Japan,” Trump said on Tuesday, calling the country “spoiled.”
Experts have warned about taking Trump’s comments at face value and believe that a deal will get done. However, they have also said that now is perhaps the time for Japan’s Prime Minister Shigeru Ishiba to take a less friendly stance when it comes to trade negotiations.
“There is some risk of a US tantrum that results in higher punitive actions by Washington this month,” said Kurt Tong, a former senior US diplomat in Asia who’s now a managing partner at the Asia Group. “If that happens, Japan may have no choice but to hit back with its own specific countermeasures.”
Trump threatens Japan with higher tariff than ‘Liberation Day’ number
President Trump on Tuesday, amid days of renewed whiplash on the tariff front, suggested he wouldn’t extend a July 9 deadline for higher tariffs to resume on trade partners. He also threatened a tariff level on goods from Japan that would be higher than those he levied on the country in April.
US manufacturing mired in weakness as tariffs bite
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EU toughens stance on Donald Trump’s tariffs as deadline looms
The European Union has hardened its stance in trade trade talks with US President Donald Trump and are insisting the US drops its tariffs on the EU immediately as part of any framework deal ahead of the July 9 deadline.
Trade commissioner Maroš Šefčovič has been told he must take a tougher line on his trip to Washington this week as Brussels attempts to remove or at least cut Trump’s levies in the long term.
Powell: Fed likely would have cut rates if not for tariffs
Federal Reserve Chair Jerome Powell said that tariffs are causing the central bank to take its time before cutting interest rates.
Powell is speaking today about the Fed’s policy stance at an ECB forum in Sintra, Portugal. When asked if the Fed would have cut interest rates by more by now if it weren’t for higher tariffs, Powell stated, “I think that’s right.”
“In effect, we went on hold when we saw the size of the tariffs,” Powell continued. “Essentially, all inflation forecasts for the United States went up materially as a consequence of the tariffs.”
Powell noted that the US economy remains healthy overall but that he expects to see the effects of tariffs if they filter through the economic data in the coming months. In recent days, Powell has faced increased pressure from President Trump to lower interest rates, including in the form of handwritten notes.
“Ignore the tariffs for a second,” Powell said of the economy. “Inflation is behaving pretty much exactly as we have expected and hoped that it would. We haven’t seen effects much yet from tariffs, and we didn’t expect to by now.”
Watch Powell speak live below:
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