Last week, President Trump announced a trade agreement reached between the United States and Vietnam. The agreement involves imposing a 20% tariff on Vietnamese goods and a 40% tariff on transshipment products. While the agreement has not been finalized yet, the 20% tariff is lower than the tariffs the United States has declared for most countries.
Due to Vietnam’s over $100 billion trade surplus with the United States last year, in April of this year, the U.S. planned to impose a 46% tariff on Vietnamese goods. However, during negotiations, the Trump administration decided to only apply a temporary 10% tariff and postponed the implementation of the new tariff until July 9th (currently postponed until August 1st).
Marco Forster, the Southeast Asia Director of Dezan Shira & Associates, stated, “In the short term, this is a significant victory for Vietnam. Concerns over the impending 46% tariff led to an abnormal surge in exports in the first half of 2025, and Vietnam’s trade surplus with the United States is expected to further expand in the second half of the year.”
Official data from Hanoi shows that in the first half of 2025, Vietnam’s trade surplus with the United States expanded to $62 billion, a 29% increase compared to the same period in 2024. This growth was primarily driven by Vietnamese exporters front-loading shipments.
According to Nikkei News analysis, the surge in exports was led by computer and electronic products. Vietnamese customs data indicates that in the first half of 2025, exports from this sector to the United States totaled $18.5 billion, a 65% increase from 2024 and a 151% increase from 2023. Meanwhile, shipments of machinery, equipment, tools, and other spare parts increased by 23% to $11.3 billion.
Forster added, “Nintendo is producing the Switch 2 in China but has also expanded production to Cambodia and Vietnam, shipping early in the first half of 2025 to take advantage of lower tariffs. The company may now increase production in Vietnam instead of China and Cambodia. Many other companies are expected to follow suit.”
Vietnam’s GDP grew by 7.5% in the first half of 2025, the fastest rate in 14 years, fueled by a robust manufacturing sector, exports, and domestic infrastructure projects. The Vietnamese government aims to achieve 8% economic growth this year and at least 10% annually in the coming years.
However, a major challenge facing Vietnam currently is how to avoid the 40% tariff on transshipment products mentioned in Trump’s statement.
In the first half of 2025, imports from China to Vietnam also surged by 26% to $84.7 billion. The types of products witnessing a drastic increase in exports to the U.S. align with the main product categories imported from China.
Vietnamese customs data reveals that in the first half of 2025, China’s exports of computers, electronic products, and components to Vietnam grew by 46% to $23.5 billion. Imports of machinery, equipment, tools, and other spare parts from China increased by 35% to $17.7 billion in the same period.
Nguyen Thu Oanh, Director of the Department of Service and Price Statistics at the National Statistics Office, remarked, “From now until the end of 2025, Vietnam’s exports will face new realities, not only related to pricing or order issues but also concerning legal, origin, and reputation matters, as well as enhancing the autonomy of the supply chain.”
The Statistics Office stated that a 20% tariff could lead to a decrease of 0.7 to 0.8 percentage points in Vietnam’s GDP growth rate. If export competitors like Bangladesh, India, or Malaysia face higher tariffs, the decline could be even smaller.
On July 5th, Nguyen Thu Oanh told the media, “If Vietnam can overcome the impact of U.S. tariffs this time, we can become an important, high-value, and sustainable part of the global supply chain.”