Vietnam and the United States have reached a new hybrid trade deal, under which Vietnamese exports to the US will face a 20% tariff, while transshipments through Vietnam will be subject to a 40% levy. In return, Vietnam has agreed to remove all import tariffs on US goods. This agreement, announced by President Trump, is seen as a positive step, with Maybank Research noting the 20% tariff rate is significantly lower than initial proposals of 46%.
The new tiered tariffs are expected to mitigate the severity of a second-half export slowdown for Vietnam, despite doubling from a baseline 10%. Key Vietnamese industries heavily dependent on the American market, such as wooden products, textiles, garments, footwear, smartphones, and consumer electronics, will need to adapt. However, Vietnam’s entrenched position in US supply chains, with major brands sourcing heavily from the country, is expected to provide some resilience.
Maybank Research said it will re-assess its 2025 and 2026 GDP growth forecast of 6.2% for potential upside following the release of 2Q GDP growth data this Sunday.
While the deal is largely positive for exports, manufacturing, and foreign direct investment (FDI), uncertainties persist, particularly regarding the definition and application of “transshipped goods.” Despite this, Vietnam is expected to remain an attractive FDI destination, especially as multinationals seek “China + 1” manufacturing alternatives to boost supply chain resilience. Registered FDI commitments surged 51.2% in the first five months of 2025, reaching US$18.4 billion, reflecting continued investor confidence.
The removal of Vietnamese import tariffs on US goods could introduce more competitive pressure for local agricultural producers, though the impact on other sectors like automobiles may be limited due to existing market dynamics. Over the long term, the US crackdown on trade rerouting is anticipated to encourage the build-up of upstream suppliers and increased local content within Vietnam, fostering a more resilient supply chain.
