U.S. and Vietnam Sign Trade Agreement to Offset China and Adjust Trade Relations

The United States and Vietnam have reached an understanding on a significant trade framework designed to enhance trade between the two countries and tackle persistent issues related to market access, according to a

issued by the White House on October 26. The Framework for an Agreement on Reciprocal, Fair, and Balanced Trade aims to deepen economic cooperation by offering U.S. exporters favored entry into Vietnam’s market, while upholding a 20% reciprocal tariff on Vietnamese exports, as outlined in a . This arrangement builds upon the 2001 U.S.-Vietnam Bilateral Trade Agreement and represents a major move to reshape trade relations as part of President Donald Trump’s broader efforts to secure advantageous terms with Southeast Asian nations, according to the VIR article.

Among the main provisions, Vietnam has agreed to eliminate tariffs on almost all U.S. industrial and agricultural products, while the U.S. will allow certain Vietnamese goods—such as coffee, nutmeg, and pineapples—to enter duty-free, as detailed in the USTR fact sheet. The framework also tackles non-tariff obstacles, with Vietnam consenting to recognize U.S. standards for vehicle safety and emissions, simplify the approval process for pharmaceuticals, and strengthen intellectual property protections,

reported. Both countries have also committed to working together on supply chain security and export regulations, reflecting shared concerns about global trade shifts and competition with China.

The White House pointed out that the agreement could help narrow the U.S. trade gap with Vietnam, which stood at $123.5 billion in 2024, according to the USTR fact sheet. Vietnamese leaders highlighted the deal’s importance for advancing digital innovation and infrastructure, with Prime Minister Huynh Quang Liem noting that the

to modernize radio networks demonstrates Vietnam’s dedication to economic modernization.

Reactions from the market have been varied. U.S. agricultural organizations have praised the increased access to Vietnam’s expanding market, but companies like

, which imports footwear from Vietnam, continue to face difficulties due to Trump’s 20% and 40% tariffs on Vietnamese products. These tariffs, part of Trump’s overall trade approach, have dampened demand for non-essential goods, with Deckers’ stock falling nearly 50% this year.

This U.S.-Vietnam trade framework is part of a larger initiative to reinforce trade ties across Southeast Asia. During the same week, Trump revealed similar agreements with Thailand, Malaysia, and Cambodia, aiming to offset China’s regional influence, as reported by

. These deals, which keep 19% reciprocal tariffs on imports from Thailand, Malaysia, and Cambodia, also include promises to remove non-tariff barriers and broaden market opportunities for U.S. agricultural goods, according to .

Nevertheless, some issues remain unresolved. The U.S. Supreme Court is set to review whether Trump’s use of tariffs as leverage in trade negotiations is lawful, as noted by

, and specifics regarding transshipment rules—which are vital for stopping Chinese goods from bypassing tariffs—are still pending, reports. In the meantime, Vietnamese exporters are adjusting to the new U.S. tariff environment by diversifying their approaches, with some seeing the changes as a chance to build stronger long-term relationships, according to China Daily Asia.

With domestic procedures yet to be completed, both the U.S. and Vietnam expect to finalize the agreement in the near future, as stated in the VIR article. The ultimate success of the deal will depend on its ability to provide real advantages to businesses and consumers while managing the complexities of U.S.-China trade relations.

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