Vietnam Emerges as a Regional Winner in US Tariff Negotiations

Vietnam emerges as a regional winner in the latest round of US tariff negotiations, with tariffs slashed to 20% from 46%. Neighboring countries, such as Thailand and Indonesia, face higher tariffs ranging from 25% to 40%. Vietnam's strong foreign direct investment and manufacturing industries may attract more businesses looking to export to the US. The market reaction has been positive, with Vietnamese equities showing minimal impact.

Vietnam has emerged as a regional winner in the latest round of U.S. tariff negotiations, with tariffs slashed to 20% from 46%. This development is significant for Vietnam's strong foreign direct investment (FDI) and manufacturing industries, which may attract more businesses looking to export to the U.S. Neighboring countries, such as Thailand and Indonesia, face higher tariffs ranging from 25% to 40%, exacerbating the competitive advantage for Vietnam [1].

The agreement, announced by U.S. President Donald Trump on social media on July 2, 2025, was reached just days before a scheduled July 9 tariff hike. The deal stipulates that the U.S. will impose a 20% tariff on most Vietnamese exports and a 40% levy on goods transshipped through Vietnam from third countries. In return, Vietnam will grant zero tariffs on U.S. imports and provide preferential access for certain American goods, such as large-engine automobiles [2].

The Vietnamese government has not yet formally accepted the tariff rates, raising questions about the finalization of the agreement. The White House has not released any documentation detailing the final terms, adding uncertainty to the deal's implementation. Despite this, the market reaction has been positive, with Vietnamese equities showing minimal impact, reflecting investor confidence in the long-term benefits of the trade deal [1].

Vietnam's exports to the U.S. accounted for roughly 30% of its total export value in 2024, making this framework deal a strategically important win for Hanoi. Once in force, clearer and potentially lower tariff treatment could deliver meaningful cost relief and margin stability for export-oriented sectors. However, the exact tariff structure and its impact on product pricing remain uncertain, pending further clarification from the U.S. and Vietnam [2].

The deal's implications extend beyond tariffs, as it could accelerate supply chain diversification and foreign direct investment (FDI) patterns in Vietnam. Manufacturers are already planning for the new tariff policy and deploying strategies to protect their margins and maintain U.S. market access. The broader trade shifts and reciprocal market-opening commitments could position Vietnam as a more attractive destination for businesses seeking to export to the U.S. [2].

References:
[1] https://www.politico.com/news/2025/07/10/vietnam-trump-tariff-deal-00447715
[2] https://www.vietnam-briefing.com/news/vietnam-us-trade-deal-2025-summary-impacts-and-strategic-responses.html/