Trade Agreement with Vietnam
President Donald Trump announced on Wednesday that the United States had reached a trade agreement with Vietnam. This announcement came as the third significant business of the government had completed a period of self-imposed deadline on July 9th.
Details of the Agreement
Trump stated that he had made a trade agreement with Vietnam, which would involve the United States raising a 20% tariff for Vietnamese exports to America and a 40% tariff for "transfers". The term "transfers" generally refers to foreign goods that are sent by another country before being exported to the USA.
Market Access
In return, Vietnam will provide the United States with access to their markets for trade. This means that the United States will be able to sell its products at zero tariff in Vietnam. Trump stated that this is something that Vietnam has never done before.
Uncertainty Surrounding the Deal
It is not immediately clear whether the deal is completed or whether Vietnam has agreed to what Trump announced. The condition of global trade remains largely uncertain.
Background
For months, Trump and his administration have been saying that countries are working to conclude trade agreements with the United States. Before July 9, when the 90-day break ended in "mutual" tariffs and taxes of up to 50% were able to enter into force, there was little progress. The restoration of these historical tariffs risks disrupting financial markets and corporate plans.
Tariffs
The tariffs for Vietnamese goods sent to the United States could have risen to at least 46% if the prices announced in April had been implemented. Vietnam is a large trading partner of the United States and was the sixth source of goods imported by the United States last year.
Trade Relationship
The value of goods imported from Vietnam is more than twice as high as the value of goods exported to the USA five years earlier, according to data from the US trade department. This makes Vietnam an important trading partner for the United States.
Update
This is a developing story and is being updated.
