UPDATE 3-Trump says US struck trade deal with Vietnam

The

United States and Vietnam struck a trade agreement that sets 20%

tariffs on many of the Southeast Asian country's exports following last-minute negotiations, U.S. President

Donald Trump and Vietnamese state media said on Wednesday.

The rate is lower than an initial 46% levy Trump announced in April on goods from Vietnam which was due to take effect next week. Trump said that goods from Vietnam would face a 20% tariff and that any trans-shipments from third countries would face a 40% levy. Details were scarce and it was not immediately clear how the trans-shipment provision would be implemented.

Vietnam would also provide the United States with more market access, with U.S. exports to the country facing no tariffs, Trump said. That agreement appears to include U.S. exporters of large-engine cars, according to Trump and Vietnamese state media. "It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam," Trump said on Truth Social.

"It is my opinion that the SUV or, as it is sometimes referred to, Large Engine Vehicle, which does so well in the United States, will be a wonderful addition to the various product lines within Vietnam," Trump said. Vietnamese President To Lam asked in a phone call with Trump earlier on Wednesday that the United States recognize Vietnam as a market economy and remove restrictions on the exports of high-tech products to the country, Vietnam News Agency reported. Those changes have long been sought by Hanoi and dismissed by Washington.

GROWING TRADE TIES Since Trump imposed tariffs on hundreds of billions of dollars in Chinese goods in his first term, U.S. trade with Vietnam has exploded, though almost all of it in the form of goods to the United States from Vietnam as importers sought workarounds for the

China levies.

Since 2018, Vietnam's exports are up nearly three-fold from less than $50 billion that year to about $137 billion in 2024, Census Bureau data shows. U.S. exports to Vietnam are up only about 30% in that time - to just over $13 billion last year from less than $10 billion in 2018. The White House and the Vietnamese trade ministry did not immediately respond to a request for comment.

Trump announced a wave of tariffs for countries around the world on April 2, before pausing the implementation of most duties until July 9. More than a dozen countries are actively negotiating with the Trump administration to avoid a steep spike in tariffs on their exports. The Trump administration has teased that a deal with

India is also coming soon, but it has said that others may not be ready by July 9.

Britain negotiated a limited trade deal

with the Trump administration, accepting a 10% U.S. tariff on many goods, including autos

, in exchange for special access for aircraft engines and British beef. Like the agreement struck with Britain in May, the one with Vietnam resembles more a framework than a finalized trade pact.

China and the United States also came to a truce

in a tit-for-tat tariff battle that saw Beijing restore American access to some rare-earth minerals but the two sides left most of their disagreements to later negotiations. VIETNAM'S TRADE SURPLUS

The high potential tariff rate for Vietnam on shipments to its largest export market reflects its large trade surplus with the United States, which U.S. government data shows topped $123 billion last year. A hefty tariff could significantly limit access for Vietnam-made goods to its main market and upend the Communist-run country's export-oriented growth model.

The government said last month that it would stick to its target for economic growth of at least 8% this year despite the looming risk from the tariffs. Vietnam has already taken several measures to reduce its trade gap with the United States, including cutting tariffs on a wide range of U.S. goods, pledging to buy more goods from the United States and stepping up its crackdown on some trade with China over possible fraud on rules of origin of exports.

Sources told Reuters last month that the United States wanted Vietnam to reduce the use of Chinese tech in devices that are assembled in the country before being exported to the United States. Hanoi has said it wanted to maintain harmonious trade ties with both the United States and China, its largest trading partner on which it heavily relies on for materials and equipment for its manufacturing industries.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)