U.S., Vietnam Finalize Trade Pact Amid China Tensions

The U.S. and Vietnam have reached a trade deal imposing a 20% tariff on Vietnamese exports to the U.S., lowered from a previously proposed 46%, and a 40% tariff on goods identified as being transshipped through Vietnam, mainly targeting Chinese-origin products. In return, Vietnam will eliminate tariffs on U.S. goods and grant greater market access, although specifics and enforcement mechanisms remain unclear. The agreement forms part of a broader U.S. effort to reduce Chinese influence in global supply chains and has drawn warnings from the Chinese government, which is considering possible responses. While the deal averts harsher tariffs, it may compress Vietnamese corporate profits, disrupt established export flows, and raise concerns about compliance with WTO rules. The pact is expected to boost U.S. vehicle and LNG exports to Vietnam, but infrastructural and market competition could limit immediate benefits. The deal is being closely watched as a potential template for future U.S. trade policy and its impact on regional geopolitics.