The recent tariff agreement has calmed bilateral tensions between Hanoi and Washington, but new trade tensions could be in store.

At the heart of Trump’s latest trade deal with Vietnam and talks with other trading partners is an effort to counter what he sees as China’s unfair practices to circumvent U.S. tariffs.

The US trade agreement with Vietnam reportedly lowers tariffs but lacks detail, triggering sharp warnings from Chinese officials.

Washington has agreed to lower its threatened 46 percent tariff on imports from Vietnam in return for increased access to the Vietnamese market.

Trump said the U.S. will impose a 20% tariff on Vietnamese exports to the U.S. Goods transshipped through Vietnam will get 40%.

Pakistan and Vietnam have agreed to take bilateral trade up to $1 billion and to finalize the Preferential Trade Agreement (PTA), during the recent visit of the Federal Minister for Commerce for emphasizing the strengthening of bilateral economic and trade ties.

Vietnam is moving swiftly to diversify its export markets and reduce economic dependence on the US after the US-Vietnam trade agreement announced on July 4, 2025, imposed steep new tariffs.

Now, a fresh trade deal between the U.S. and Vietnam has eased some of those concerns. The agreement sets tariffs at 20%, far lower than the 46% rate floated in April. That news sent retail stocks climbing.