The United States and Vietnam have formally completed the framework for a new trade agreement, marking a significant step toward establishing “reciprocal, fair, and balanced trade” between the two nations. This development, expected to crystallize into a formal agreement soon, offers Vietnam the possibility of receiving certain tariff exemptions while maintaining a 20% baseline for others.
This framework, published following several rounds of negotiations, lays the groundwork for possible annulments of levies on select goods and services, as outlined in Executive Order 14346. The annex titled “Potential Tariff Adjustments for Aligned Partners” identifies goods eligible for tariff exemptions based on an individual reciprocal agreement. However, specific products subject to these exemptions remain undisclosed.
Vietnam, currently applying no tariffs on American goods, has agreed to tackle various non-tariff barriers. This includes revising regulatory standards, such as emission norms for US vehicles, authorizations for American medical devices, pharmaceuticals, and agricultural products, and the implementation of specific intellectual property treaties like the WIPO Internet Treaties.
The evolution of this trade framework follows significant diplomatic engagement, with US and Vietnamese leaders working to avert a potential economic conflict. An initial announcement of extensive reciprocal tariffs by the US threatened a 46% duty imposition on Vietnamese imports. The US administration, however, suspended these tariffs for 90 days, allowing time for bilateral discussions. In an effort led by President Donald Trump and Vietnamese Secretary To Lam, the tariff baseline was successfully negotiated down to 20%, alongside guarantees for a complete waiver on US exports to Vietnam, effective from July 31.
As the second-largest partner for Vietnam, the US remains a pivotal market for Vietnamese exports. Without this agreement, any substantial tariff increases could potentially destabilize Vietnam’s economy, underscoring the necessity for timely negotiations. Vietnam’s manufacturing sector, characterized by high efficiency and low costs, has been keen to expand its market reach.
Constructive dialogue between US Ambassador Marc E. Knapper and Vietnam’s Deputy Prime Minister Bui Thanh Son highlighted the positive progress of these negotiations. Son emphasized the importance of understanding Vietnam’s economic profile and praised the collaboration between the two nations.
This deal represents a concerted effort to secure mutually beneficial economic relations, setting a precedent for how strategic partnerships can foster stronger global trade dynamics.