U.S. Cuts Vietnam Tariff to 20% Amid Trade Talks

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The United States has reduced tariffs on imports from Vietnam to 20 percent, significantly down from the previous 46 percent. The change, effective from August 7, 2025, was announced via executive order by President Donald Trump and follows a series of bilateral trade negotiations.

Dr. Le Quang Minh, a trade expert from the University of Economics and Business under Vietnam National University-Hanoi, said the move underscores Vietnam’s position as a vital partner in the Southeast Asian region. “The 20 percent rate is relatively appropriate,” Minh noted in a recent interview, pointing to Vietnam’s notable trade surplus with the U.S.

Minh emphasized that the tariff cut is both a recognition of Vietnam’s role in the global supply chain and a prompt for the country to accelerate domestic reforms to remain competitive internationally.

Compared to other countries, Vietnam’s new tariff rate is more favorable. India currently faces a 25 percent tariff, Canada 35 percent, and China 50 percent. These figures reflect a broader U.S. effort to realign trade partnerships based on strategic and economic considerations.

Minh acknowledged that regional competitors such as Thailand, Cambodia, Indonesia, Malaysia, and the Philippines face slightly lower tariffs at 19 percent. However, he said this minimal gap is unlikely to shift American investment away from Vietnam.

To build on the momentum of this trade adjustment, Minh recommended that Vietnamese ministries continue dialogue with U.S. counterparts to secure further sector-specific reductions. He also advised greater transparency in product origin documentation to address ongoing U.S. concerns regarding trade fraud and illegal transshipment.

“Vietnam needs to provide businesses with clear guidance and ensure product traceability to maintain U.S. confidence in the partnership,” Minh said.

He further encouraged Vietnamese firms to invest in research and development, improve local content in their products, and establish their brands to increase export value and reduce dependency on cost-based competition.

“Vietnamese companies should negotiate better terms with U.S. importers, control production expenses, and identify alternative markets to diversify risk,” Minh added.

Though still higher than the ideal for exporters, the 20 percent rate marks a meaningful shift in trade policy and signals the United States’ ongoing interest in maintaining a strong economic relationship with Vietnam.