U.S. and Vietnam Sign Trade Agreement to Offset China and Adjust Trade Relations
- U.S. and Vietnam finalize trade framework to boost commerce, reduce $123.5B deficit, and address market access barriers under Trump's Southeast Asia strategy. - Agreement includes Vietnam lowering tariffs on U.S. industrial/agricultural goods, U.S. granting duty-free access to select products, and resolving non-tariff barriers like vehicle standards. - Mixed market reactions emerge as U.S. agribusiness benefits but Vietnamese-sourced companies face Trump's 20-40% tariffs, complicating supply chains and c
The United States and Vietnam have reached an understanding on a significant trade framework designed to enhance trade between the two countries and tackle persistent issues related to market access, according to a
Among the main provisions, Vietnam has agreed to eliminate tariffs on almost all U.S. industrial and agricultural products, while the U.S. will allow certain Vietnamese goods—such as coffee, nutmeg, and pineapples—to enter duty-free, as detailed in the USTR fact sheet. The framework also tackles non-tariff obstacles, with Vietnam consenting to recognize U.S. standards for vehicle safety and emissions, simplify the approval process for pharmaceuticals, and strengthen intellectual property protections,
The White House pointed out that the agreement could help narrow the U.S. trade gap with Vietnam, which stood at $123.5 billion in 2024, according to the USTR fact sheet. Vietnamese leaders highlighted the deal’s importance for advancing digital innovation and infrastructure, with Prime Minister Huynh Quang Liem noting that the
Reactions from the market have been varied. U.S. agricultural organizations have praised the increased access to Vietnam’s expanding market, but companies like
This U.S.-Vietnam trade framework is part of a larger initiative to reinforce trade ties across Southeast Asia. During the same week, Trump revealed similar agreements with Thailand, Malaysia, and Cambodia, aiming to offset China’s regional influence, as reported by
Nevertheless, some issues remain unresolved. The U.S. Supreme Court is set to review whether Trump’s use of tariffs as leverage in trade negotiations is lawful, as noted by
With domestic procedures yet to be completed, both the U.S. and Vietnam expect to finalize the agreement in the near future, as stated in the VIR article. The ultimate success of the deal will depend on its ability to provide real advantages to businesses and consumers while managing the complexities of U.S.-China trade relations.
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