Vietnam Fumes as Trump Allegedly Scraps Tariff Deal at Last Minute

 

A trade deal between the United States and Vietnam is reportedly in tatters after President Donald Trump allegedly raised tariffs at the eleventh hour, surprising Hanoi and sparking accusations of a unilateral public announcement without Vietnam's consent.

 

The revelation, based on four unnamed insider sources cited by Politico, casts doubt on whether a genuine agreement was ever reached, despite Trump's public claims.

 

Vietnam had believed it had secured a significantly lower tariff rate with the US, only for President Trump to unilaterally declare a much higher figure.

 

This move has reportedly led to the Vietnamese government's refusal to formally acknowledge the deal that Trump publicised last week, in which he claimed President To Lam had approved the terms.

 

The lack of any official document from either side has further fuelled speculation regarding the agreement's true status.

 

 

 

A Sudden Shift

Just days before a 8th July trade negotiation deadline, Trump announced a framework agreement with Vietnam via Truth Social on 2nd July, touting it as the second such deal for the US.

 

His post stated that Vietnamese exports would face a 20% tariff, a substantial drop from the original 46% announced in April, while other countries faced 40%.

 

 

In return, Trump claimed Vietnam would "open its market to the United States," allowing US goods to be sold at "zero tariffs."

 

However, this announcement reportedly sent shockwaves through Hanoi.

 

According to sources, Vietnam's negotiating team had understood the tariff rate would be closer to 11%.

 

Crucially, during his phone call with President Lam – who was not part of the initial tariff negotiations – Trump allegedly failed to mention any specific figures before publicly announcing a rate almost double what Vietnam believed was agreed.

 

A Washington lobbyist working with Asian governments expressed widespread surprise within the US, stating, "Trump plays everyone."

 

The lobbyist added that this move left the Vietnamese government "shocked, disappointed, and angry."

 

While a White House official countered that the Vietnamese government was aware of the tariff rates before the phone call, neither side has released any final signed agreement, leaving the implementation and even the validity of the tariffs in question.

 

 

 

Erosion of Trust

"It just adds uncertainty," remarked Wendy Cutler, former Acting Deputy US Trade Representative and now Vice President of the Asia Society Policy Institute. "You think you've negotiated, but he can go back on his word and change the terms, and in this case, he seems to have acted unilaterally and announced publicly without Vietnam's agreement."

 

 

 

Since Trump's social media announcement, Hanoi's government has remained largely silent on the tariff rates.

 

State media reports on the 2nd July agreement only mentioned that Trump's phone call with Lam resulted in a  "joint statement on a balanced and fair reciprocal trade agreement," the contents of which have not been disclosed.

 

This reticence may reflect Hanoi's displeasure over Trump's actions, which reportedly derailed a more favourable draft joint statement seen by Politico.

 

Regional experts warn that such actions could severely undermine decades of diplomatic and burgeoning trade relations between the US and Vietnam.

 

Trade between the two nations has soared from $2.9 billion in 2002 to over $139 billion in 2022, making the US Vietnam's sixth-largest importer.

 

"Their trust in the US as a reliable partner, built over 30 years, is certainly severely damaged," commented Scot Marciel, former Deputy Assistant Secretary of State for East Asian and Pacific Affairs. "In terms of US-China influence, China will benefit from this."

 

Other countries are also reportedly aware of the last-minute tariff changes, underscoring the broader uncertainty felt by US trade partners.

 

"When a president does that, it makes negotiating partners distrustful, and other countries are watching," said Harry Broadman, a former Assistant US Trade Representative. "If you're at the negotiating table with country X, and you just saw that country Y got a deal but it was violated, you might say, 'Why should I waste my time with you? How do I know that what we agree on will ultimately be an agreement?'"