US and Vietnam finalize framework for new trade deal News
U.S. Department of State, Public domain, via Wikimedia Commons
US and Vietnam finalize framework for new trade deal

The United States and Vietnam have announced the completion of a framework for an anticipated trade deal in the coming weeks. The framework agreement aims to promote “reciprocal, fair, and balanced trade,” and provides Vietnam with the chance of certain tariff exceptions while maintaining a 20 percent baseline.

The new framework, now published, provides for the possibility of certain annulments of levies on goods and services, pursuant to US Executive Order 14346, of September 5. In its annex, titled “Potential Tariff Adjustments for Aligned Partners,” the order outlines a list of goods that are eligible to be exempted from imposed tariffs based on an individual agreement on reciprocal trade. What particular products will be exempted, however, has not been announced yet.

Although Vietnam currently applies no tariffs on US goods and services, the framework agreement addresses a number of non-tariff barriers. In particular, the country agreed to adjust certain regulatory hurdles, such as emission standards for US vehicles, authorization for US medical devices, pharmaceutical products, and agricultural exports, and implementation of certain intellectual property treaties such as the WIPO Internet Treaties.

Upon the initial announcement of widespread “reciprocal tariffs” by the US administration and the subsequent Executive Order 14257 in April 2025, Vietnam was expected to be levied a staggering tariff rate of 46%. A few days later, the “reciprocal tariffs” were suspended by the administration for a period of 90 days, leaving room for individual countries to engage in negotiations with the United States.

During the 90 days, the US and Vietnamese administrations, amid bilateral talks between President Donald Trump and General Secretary To Lam, agreed on a reduction of the baseline tariff rate down to 20% in exchange for a full waiver of any tariffs for US products exported into the country. This rate was then put into effect by an executive order on July 31, “adjusting” the reciprocal tariffs for numerous countries, including Vietnam.

With the US having been Vietnam’s “second-largest trading partner” and the largest destination for Vietnamese exports in 2024, any substantial US tariff rate increase had the potential of carrying severe negative consequences for the economic stability of the country. While Vietnam’s “high efficiency and low cost” manufacturing had the possibility of diversifying its markets, economic commentators highlighted the necessity of a new trade deal with the US.

On Thursday, during a meeting between US Ambassador to Vietnam Marc E. Knapper and Deputy Prime Minister Bui Thanh Son, both parties reported constructive and promising progress of negotiations between the two countries. In particular, Son reportedly “praised the close coordination between the two sides and urged the U.S. to take Vietnam’s economic characteristics into account during the negotiation process.”

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