President Donald Trump on Wednesday announced what he’s calling a “great deal” with Vietnam—a preliminary trade pact that would roll back some tariffs while imposing others, in a move critics are calling a political sleight of hand and a potential blow to American importers.
According to Trump’s statement on Truth Social, the agreement includes a 20% blanket tariff on all imports from Vietnam and an even steeper 40% tariff on so-called “transshipped” goods—products believed to originate from China and be funneled through Vietnam to dodge U.S. tariffs.
While the president framed the deal as a strategic victory over Chinese circumvention tactics and a boon for U.S. exporters, economists and trade experts are sounding the alarm.
“Let’s be clear: U.S. companies will pay these tariffs—not Vietnam,” said a former USTR official. “This isn’t a ‘win.’ It’s a tax on American businesses and, eventually, American consumers.”
A Quiet Concession?
This deal comes just days before a sweeping round of global tariffs—unveiled in April and temporarily paused for 90 days—are due to snap back into effect. With that clock ticking, Trump appears eager to declare victories, even if they’re more symbolic than substantive.
The Vietnamese government issued a carefully worded statement, calling the deal a “framework for a fair and balanced reciprocal trade agreement,” noting that Vietnam would open its markets to American goods while expecting reduced tariffs in return.
But according to several officials close to the negotiations, Vietnam was poised to face a 46% tariff before Trump hit pause. By comparison, a 20% rate might seem moderate—except that it still represents a serious cost increase for U.S. importers of Vietnamese goods like garments, footwear, furniture, and electronics.
What Is “Transshipping”?
The term “transshipping” refers to goods that are assembled or repackaged in one country but originate from another—typically China. The Trump administration has accused Vietnam of being a conduit for Chinese manufacturers attempting to skirt U.S. tariffs. But determining what constitutes “transshipped” material is notoriously murky.
“It’s almost impossible to trace every bolt or button,” said a senior trade compliance analyst. “The danger is that legitimate Vietnamese manufacturers will get swept up in this and penalized unfairly.”
Business Groups Unimpressed
Multiple U.S. industry associations have expressed concern. The National Retail Federation called the new tariffs “an attack on American supply chains,” while the Footwear Distributors of America warned that shoe prices—already impacted by prior China tariffs—would rise again.
Even the Catfish Farmers of America, typically supportive of protectionist policies, noted that previous tariffs had failed to stop Vietnamese imports from dominating the market. “We’ve been hit hard for two decades,” they said in a filing. “We need targeted action, not vague frameworks.”
A Pattern Emerges
This is Trump’s second “mini-deal” since his tariff blitz in April. Like the recent U.K. pact, the Vietnam agreement includes vague promises, some tariff reshuffling, and few binding commitments. Critics argue the deals are more political theater than economic strategy—meant to show progress without solving structural issues.
“These aren’t trade agreements,” said one former Obama-era trade official. “They’re glorified press releases.”
Still, the optics may work. Trump posted on Truth Social that Vietnam would “open up their markets to American businesses” and claimed it as proof his aggressive stance gets results. His campaign quickly touted it as a foreign policy win—even as businesses braced for higher costs.
The Bigger Picture
U.S. trade policy is shifting rapidly as Trump prepares for his re-election bid. With his administration now balancing negotiations with more than a dozen countries, experts say the global economy could face serious instability.
“The message to foreign partners is: cave quickly, or face the tariff hammer,” said one European diplomat.
Whether this approach ultimately boosts American industry or undercuts it through isolation and cost inflation remains to be seen. But one thing is clear: with tariffs set to return in full force next week, the Vietnam deal is likely just the first act in another volatile trade season.
And American businesses? They’re caught in the middle—again.
