US agreement on 20% tariff for goods imported from Vietnam 'a success': expert

Reaching agreement with the U.S. on 20% tariff for goods imported from Vietnam and even 40% for transshipping is a success for the Southeast Asian country, said Ho Quoc Tuan, a senior lecturer of accounting & finance at University of Bristol, the UK.

"It is a success given the context that one month ago the U.S. trade advisor specifically named Vietnam in the assessment of transshipping countries and wanted to impose heavy taxes," Tuan wrote on his Facebook account.

He noted that evaluating whether this deal is good or not depends on expectations. For optimistic views that hope for 10-20%, this is not very good because it is at a higher level.

But in the past two weeks, there were pessimistic views due to some international articles that Vietnam would be taxed the most heavily in ASEAN, leading to some fear of a tax rate of nearly 30%.

"Therefore, 20% is not a bad number. The reaction of Nike shares shows that U.S. customers are optimistic," he wrote.

Vietnam was Nike’s largest supplier of both footwear and apparel, accounting for 50% and 28% of the brand’s global output, respectively, according to the U.S. firm’s 2024 annual report.

As of end-January, 98 Nike suppliers operated in Vietnam, with a total of 162 factories and 493,000 workers. Major Nike suppliers in the country include Huali, Taekwang, Feng Tay, Chang Shin, Pou Chen, Ching Luh, Far Eastern, Paiho, Avery Dennison, and Regina Miracle.

Based on the experience of the UK and China's deal, this is just the finalization of the point of view by the Vietnamese and U.S leaders. Regarding details, there may still be a lot of discussion, according to Tuan.

"For details, it took more than a month for the UK, while China had trouble with implementation and had to renegotiate the procedures in London. It took more than two weeks for China to finalize the details of the procedures."

He pointed out some unclear points: "Will 20% apply to all non-transshipped goods? Are there any exceptions that are better or worse? What basis to define "transshipping" for application of 40%? In addition to the reciprocal tax, there are many other types of taxes that President Trump is imposing on other countries. Does Vietnam's trade deal include this framework, or does it include the reciprocal tax only?"

Regarding possible impacts on Vietnamese industries, Tuan commented that industries that are subject to taxes around or close to 20% would benefit, while those that see their tariffs rise from very low levels to 20% would suffer.

"Impacts on FDI attraction depend on what tariffs Vietnam's competitors will get from the U.S. Is it worth it for investors to leave Vietnam for other countries even if there is a 10% difference? The story is not just about tariffs, but about many other things."

Tuan stressed that Vietnam cannot devalue the VND to balance the impact of tariffs as some suggested, given the risk of being accused of manipulating the exchange rate.

"Remember the lesson of Canada negotiating a trade deal but then imposing a digital service tax (not tariffs on goods); President Trump immediately stopped the negotiations.

"Instead, Vietnam should think about how to support businesses to reduce costs to offset tariffs. As for the exchange rate, let the market adjust. If there is a lot of capital outflow, we don't need to do anything, the USD will increase against the VND by itself," he added.

Below is a news alert posted on AmCham Hanoi's website.

Vietnam's Party chief To Lam and U.S. President Donald Trump on Wednesday stated that they welcome the agreement reached by the two countries' negotiating teams on the Joint Vietnam-United States Statement on a Fair, Balanced, and Reciprocal Trade Agreement Framework.

Lam and Trump held a telephone conversation at 8 p.m (Vietnam time) on the same day to discuss bilateral relations and negotiations on reciprocal tariffs, Vietnam's Ministry of Foreign Affairs reported.

President Trump said he highly appreciates Vietnam’s commitment to offering preferential market access to U.S. goods, including large-engine vehicles.

He affirmed that the U.S. would significantly reduce reciprocal tariffs on many of Vietnam's export items and would continue to work with the Southeast Asian country to address obstacles affecting bilateral trade ties, particularly in areas prioritized by both sides, according to the ministry.

On Truth Social, US President Trump wrote: "It will be a Great Deal of Cooperation between our two countries. The Terms are 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."

This is down significantly from the 46% in the original reciprocal tariff plan announced on April 2, 2025

"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. In other words, they will "OPEN THEIR MARKET TO THE UNITED STATES," meaning that, we will be able to see our product into Vietnam at ZERO Tariff."

"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. Dealing with General Secretary To Lam, which I did personally, was an absolute pleasure," he added.