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U.S. Imposes 20% Tariff on Vietnamese Goods: How Should Businesses Respond?
On July 2, 2025, U.S. President Donald Trump officially announced a 20% tariff on all goods exported from Vietnam to the United States and a 40% tariff on goods considered “transshipped.” This decision came after 90 days of intense trade negotiations, culminating in a bilateral agreement in which Vietnam committed to fully open its market to U.S. goods, including large engine vehicles, agricultural products, and high-tech items.
This announcement has immediately triggered significant impacts on the export activities and supply chains of Vietnamese businesses, especially in low-margin industries such as textiles, seafood, electronics, furniture, and precision engineering. So, what should businesses do to cope with this unprecedented tariff shift?
1. Understanding the 20% U.S. tariff on Vietnamese goods to respond effectively
According to President Trump’s post on Truth Social, confirmed by CNN and Reuters, the Vietnam–U.S. trade agreement includes three key points:
• The U.S. will impose a 20% tariff on all goods originating from Vietnam
• Transshipped goods will be taxed at 40%
• Vietnam will eliminate all import tariffs on U.S. goods, including vehicles, agricultural products, and consumer items
However, the agreement lacks specific guidance on:
• How "transshipping" is defined
• Whether tariffs vary by product category or are uniformly applied
• How local value-added and foreign content are calculated
Businesses are now facing ambiguity and planning difficulties unless they quickly adapt and stay informed.
2. What is transshipping? The risk behind an unclear definition
According to Bloomberg’s analysis, “transshipping” may refer to goods of Chinese origin that undergo minimal processing in Vietnam before being exported to the U.S. If this is the sole criterion, the impact may be limited.
However, if the U.S. defines “transshipping” based on the percentage of foreign content in a product, the risk to businesses will be significant. Sectors like electronics assembly, consumer devices, and textiles—heavily reliant on Chinese supply chains—could face serious challenges.
A 2023 independent study by Iyoha, Malesky, Wen et al. indicated that pure transshipping through Vietnam accounts for only 2% to 16% of total exports. Still, without transparent determination mechanisms, legitimate exports may be mistakenly penalized.
Suggested solution for businesses: Maintain tight control over supply chains, clearly document origin, and work with expert advisors on rules of origin, HS codes, and customs documentation. Dolphin Sea Air Services Corp offers support in reviewing certificates of origin (C/O) and optimizing export documentation in compliance with international standards.
3. Actual tariff rates may be lower than 20% with proper localization
While the headline tariff is 20%, sources from Politico and Bloomberg report that the agreement may include clauses such as:
• Lower tariffs for products with higher local value-added
• Preferential rates for key sectors such as agriculture, toys, footwear, and consumer goods
• If tariffs are based on foreign content, the average effective rate may fall to around 16%
This implies that companies can minimize the impact by optimizing supply chains, increasing local production ratios, and maintaining transparent sourcing documentation.
4. What should businesses do? A 4-step urgent response plan
Step 1: Diversify export markets
• Reduce dependence on the U.S. by expanding to EU, Japan, South Korea, the Middle East, and Northern Europe
• Leverage existing free trade agreements Vietnam has signed
Step 2: Control and verify product origin
• Review all production processes, from raw materials to packaging
• Standardize C/O documentation, HS Codes, and use internal compliance systems
• Dolphin Sea Air provides the technology solutions that integrate data between factories, customs, and logistics partners, enabling real-time traceability
Step 3: Optimize costs and protect margins
• Control raw material and logistics costs, improve operational efficiency
• Work with professional logistics partners to optimize delivery time and costs. Dolphin Sea Air offers comprehensive transportation services by air, sea, and cross-border trucking with competitive rates and flexible schedules
Step 4: Proactively collaborate with associations and regulators
• Regularly update on new tariff policies from the General Department of Customs, Ministry of Industry and Trade, and trade associations
• Provide feedback and real data to support policy development and bilateral dialogue with the U.S.
5. Dolphin Sea Air’s solution – Navigating through turbulent waters
In a rapidly changing global trade environment, businesses need logistics partners who not only operate efficiently but also understand policy and offer strategic advice.
Dolphin Sea Air Services Corp provides:
• Strategic consulting on tariffs, origin, and international trade
• C/O and HS Code optimization tailored to each product category
• End-to-end logistics solutions from warehousing and transportation to customs clearance
• Real-time data integration between businesses, customs, ports, and carriers
With years of experience and cutting-edge technology, Dolphin is committed to supporting Vietnamese exporters in adapting to evolving global policies—especially as U.S. tariffs become more complex and aggressive.
CONTACT NOW:
DOLPHIN SEA AIR SERVICES CORP
Fanpage: https://www.facebook.com/dolphinseaairlogistics/
Email: info@dolphinseaair.com
Hotline: 1900 986813
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