HANOI/NEW YORK -- The U.S. and Vietnam have reached a trade agreement to lower tariffs on each other's goods, both sides said Wednesday.
U.S. President Donald Trump said in a Truth Social post that "Vietnam will pay the United States a 20% Tariff on any and all goods sent into our Territory, and a 40% Tariff on any Transshipping."
"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," the president also said, adding that this meant zero tariffs on American products.
Strictly speaking, tariffs are paid by importers in the destination country, not by the exporting country. Exporters may decide, however, to lower prices in response.
Trump held a phone call with Vietnamese Communist Party General Secretary To Lam on Wednesday, in which they agreed to substantial reductions in tariffs on goods from the Southeast Asian nation, the Vietnamese government said.
"President Trump highly valued Viet Nam's commitment to granting preferential market access for U.S. goods, including large-engine automobiles," the government reported.
The Vietnamese side made no mention of tariff rates.
Vietnam has pursued a trade deal with the U.S. since the Trump administration hit Hanoi with one of the highest "reciprocal" tariff rates in the world at 46% due to the country's big trade surplus with Washington. This tariff was paused for 90 days, but the deadline is approaching.
The U.S. trade deficit with Vietnam last year was around $123 billion, making Vietnam the biggest net exporter to the U.S. behind China and Mexico.
The two countries went through multiple rounds of technical negotiations. Vietnam has signaled willingness to buy planes, energy and agricultural products from the U.S. to reduce the trade imbalance.
The Communist Party-led country also fast-tracked a $1.5 billion golf resort and luxury residential project of the Trump Organization in Vietnam that started construction in May. Trump's son Eric Trump also went to Ho Chi Minh City to scout locations for a potential Trump Tower.
A 46% tariff rate would have been a huge hit to Vietnam's economy, which relies on manufacturing and exports.
This year marks the 30th anniversary of normalization in diplomatic relations between the two countries. In 2023, Vietnam and the U.S. upgraded their relationship to a comprehensive strategic partnership, the highest level in Vietnam's diplomatic hierarchy. They were enemies during the Vietnam War for around two decades up until 1975.
Additional reporting by Mai Nguyen in Hanoi
