On July 2, 2025, U.S. President Donald Trump announced a trade agreement with Vietnam. Under this deal, the U.S. will impose a 20% tariff on Vietnamese exports and a 40% tariff on transshipped goods, while Vietnam will reduce import tariffs on U.S. goods to 0%.
How will these new tariff levels affect Vietnamese law going forward?
1. No Direct Impact on Vietnam’s Domestic Tax Laws
The 20% and 40% tariffs are imposed by the United States on goods originating from Vietnam and are not set by Vietnamese authorities. Therefore, Vietnam’s domestic tax legal framework—including the Law on Export and Import Duties and related decrees and circulars—does not need to be immediately amended in response to this U.S. decision.
However, the 0% tariff preference for U.S. goods entering Vietnam will have significant legal implications:
2. Changes to the Special Preferential Import Tariff Schedule
Vietnam will need to amend or issue new legal documents (typically a Government Decree) to provide for the 0% tariff rate on U.S. goods eligible for preferential treatment, ensuring consistency with international commitments or bilateral agreements. This special preferential tariff schedule will serve as the legal basis for customs authorities to collect tariffs accurately and fully.
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3. Impact on Laws Regarding Rules of Origin
To qualify for the 0% tariff, U.S. goods must meet specific rules of origin. Vietnam may need to issue a guiding Circular on certificates of origin and inspection procedures to ensure conditional preferential treatment is properly enforced and to prevent trade fraud.
4. Impact on Competition Law and Trade Remedies
With U.S. goods entering Vietnam at lower prices due to tax preferences, domestic industries may face intense competition. If substantial harm is caused, Vietnam may consider applying trade remedy measures (anti-dumping, anti-subsidy, and safeguards) in accordance with the Law on Foreign Trade Management and related regulations to protect local businesses.
5. Legal Uncertainties Remain
Although tariff rates have been publicly announced, several key legal details remain unclear:
- Will the U.S. 20% tariff apply to all Vietnamese goods not classified as “transshipped,” or will some products be exempt?
- What criteria will be used to determine transshipped goods—such as the required percentage of domestic value added—to prevent origin fraud?
- Does the agreement include any commitments regarding VAT, non-tariff barriers, or sanitary and phytosanitary standards (SPS/TBT)?
As many legal aspects remain ambiguous following President Donald Trump’s social media announcement, the legal insights provided by DNP Viet Nam Law Firm are for reference purposes only at this time.
The above content provided by DNP Viet Nam Law Firm is for reference only. For more details and answers to questions, Customers/Partners please contact the contact information below!
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