Vietnam

Trade Dominance or Trade Domino? Trump Announces Trade Deal with Vietnam

Wed, 02 Jul 2025 19:38:18 GMT

Less than a week before the Trump administration’s 90-day pause on many reciprocal tariffs with several countries is set to expire, President Donald Trump announced a trade deal with Vietnam on Wednesday. The deal, according to Trump, allows the U.S. “total access” to Vietnam’s markets with a zero tariff on U.S. products exported to Vietnam.

A deal with Vietnam could benefit U.S. commodities that face higher tariffs, including fruits, nuts, pork and beef exports.

The president made the announcement on his Truth Social site, saying Vietnam will pay the U.S. a 20% tariff on any goods sent into the U.S. and a 40% tariff on any goods that originate in another country and then are transferred to Vietnam before coming to the U.S.

🚨 pic.twitter.com/i35oMvbEvW
— Rapid Response 47 (@RapidResponse47) July 2, 2025

When trade talks started with Vietnam last month, Vietnamese officials had pledged to boost purchases of American goods, including farm products and energy. However, no specific trade volumes were announced with the trade deal.

What’s the potential for agriculture? Dan Basse, founder and president of AgResource Company, says this could help gain greater access for fruits, nuts and horticulture products, which have tariffs ranging from 15% to 20%, versus corn, soybeans and soybean meal.

“In the case of corn and soybeans and meal and wheat, we’re talking about tariffs today that are 1% to 2%, that’ll go to zero, so it’s something, don’t get me wrong, it’s 5¢ or 10¢ in a bushel of corn, maybe 7¢ to 12¢ on beans, but it is not the panacea that’s going to get a lot of Vietnamese demand going forward,” Basse says.

The trade deal came as a bit of a surprise on Wednesday. Earlier this week, Treasury Secretary Scott Bessent said earlier this week that while the focus of the administration is getting the One Big Beautiful Bill across the finish line this week, that focus shifts back to trade next week. Bessent warned countries could be notified of sharply higher tariffs as a deadline approaches.

Is this trade deal the start of a domino of trade deals that could fall ahead of next week’s deadline? It’s possible, but Stand Grain’s Joe Vaclavik says many more are needed to shift the sentiment in the commodity market to a bullish tone.

“Get a trade deal with China that mirrors Phase One, that includes large purchase agreements, then it’s a game changer,” Vaclavik says. “But anything less than that, as of right now, I don’t think is going be a market mover or a game changer from a supply and demand standpoint.”

Vaclavik agrees with Basse, in that Vietnam alone isn’t a huge demand story for corn and soybeans.

“I think you’re going to see a lot of these announcements like with Vietnam where it sounds great, but Vietnam consumed 16 million metric tons of corn last year. That’s not enough to really put them on the map as something that’s going to move the market. You need a China, a country who consumes 300 million metric tons of corn per year to come in and agree to agree and also agree to buy. And that’s how you move the needle.”

Push for More Protein?

Protein exports are also an area of opportunity. U.S. dairy exports have shown strong growth into Vietnam, with increases in nonfat dry milk powder, whey, and lactose.

As for meat exports, figures from the U.S. Meat Export Federation (USMEF) show shipments to Vietnam in 2024 included:

5,052 metric tons of beef and beef variety meat valued at $43 million
and 4,662 metric tons of pork and variety meat with a value of $10 million.

The U.S. current ranks fifth in top exporters to Vietnam, but it’s key to note the U.S. is the largest trading partner with Vietnam that does not have a Free Trade Agreement (FTA). With talks of tariff reductions, it could hep make U.S. pork more competitively priced compared to big competitors like Brazil, the European Union and Canada. Those countries currently have duty-free access to Vietnam.

The current tariff rates vary by product, including:

Chilled beef carcass/ ½ carcass: 30%
Chilled beef bone-in: 20%
Chilled beef boneless: 14%,
Frozen beef bone-in/frozen carcass 20%
Frozen boneless beef: 14%
Chilled pork: 22%
Frozen pork: 10%
Offal: 8%.

Fact sheet on meat exports to Vietnam

(USMEF )

Vietnam’s Growing Population

Farm Journal’s Michelle Rook visited Vietnam earlier this year and saw firsthand the potential growth. Vietnam has a 100 million people and a growing middle class looking to add protein to their diet. With limited soybean crushing capacity, the country currently depends on soybean meal imports for their livestock and aquaculture feed needs.

She reports the country’s soy processing industry is small with only four plants, which import 2 million tons of soybeans annually, including from the U.S. According to Rook’s reporting, that could be an area where soybean exports could grow, fueling Vietnam’s growing aquaculture and livestock production.

You can read and watch Rook’s in-depth reporting here .

Vietnam's Growing Middle Class and Need for Protein Provide Opportunities for U.S. Soy Exports

Tue, 29 Apr 2025 22:01:42 GMT

Vietnam’s trade surplus to the U.S. had President Trump originally proposing reciprocal tariffs of 46%. However, the two countries are inching close to a trade deal that could open the door to more U.S. exports.

South Dakota farmers were recently on a trade mission to Vietnam and saw first hand the country’s growing need for protein and the opportunity to grow exports.

Vietnam’s population of 102 million people includes a young and growing middle class. The average consumer is 30 years old. While the median income per person is low, it’s improving, and so is their diet.

Rice and soy foods are a big part of the Vietnam culture. A quarter of the soybeans imported are food grade used by companies such as Ichiban, a leading producer of tofu and soy milk. Ichiban uses 100% U.S. soybeans.

Vietnam consumers are also adding more animal protein to their diet, according to Mike McCranie, vice chair of the U.S. Soybean Export Council.

“Vietnam is one of those countries that actually has a lot of pork already in their diet —they really like their pork,” he says.

Vietnam is a leading pork producer with 27.5 million hogs in 2024, an 85% recovery from pre-African Swine Fever levels, after a shift to integrated production.

“Approximately 80% of farms are integrated and 20% are backyard farms.” says Thibaut Vitre, industrial operations director of feed and pet food company Vienovo Vietnam.

Vietnam also raises 550 million chickens, 18 billion eggs and 84 million ducks annually, but they also import poultry.

“The U.S. is No. 1 market share for poultry imported to Vietnam at a value of $181 million U.S. dollars,” says Dang Thi Dong Phuong, with the USA Poultry and Egg Export Council.

The country is also home to 60 million beef cattle and is the world’s 4th largest seafood producer and exporter.

“We export to around 170 countries,” says To Thi Tuong Lan, deputy general secretary, Vietnam Association of Seafood Exporters and Producers. “The value in total seafood from Vietnam is around $10 billion U.S. dollars per year.”

The U.S. accounts for 20% of Vietnam’s seafood exports with shrimp holding the top spot.

“Shrimp is about 40%, 45% based on different years,” says Ha Tran Ngoc, sourcing manager, BioMar Viet Uc. “For example, in 2022, it was about $4.5 billion.

That’s followed by catfish, at a $2 billion export value annually.

About a third of the seafood is still wild caught with the balance raised on farms such as Co May, which uses U.S. soy in their feed ration because it’s a cheaper and more sustainable protein.

“Fish meal is very expensive in formulation, so people prefer to use more soybean meal,” Ha Tran Ngoc says.

Soybean meal has become a total replacement of fish meal in a lot of cases, McCranie adds, and it responds as good as, and in some cases better than, their other diets.

This all adds up to a growing feed market of 25 million metric tons annually. However, the soy processing industry is small with only four plants that import 2 million tons of soybeans annually, some of which is from the U.S.

“The capacity of this plant is 500 tons per day on a soybean seed-crushing basis,” says Hemant Bansal, general director of soy processor Sethia Hemraj. “So far, whatever beans we’ve procured, they’re 100% from U.S.”

With limited crushing capacity, Vietnam currently depends on soybean meal imports for their growing protein sector.

“On average, every year Vietnam imports about 5.7 to 5.9 million metric tons of soybean meal from all origins,” says My Hanh Tran, Vietnam country representative with the U.S. Soybean Export Council.

But currently, the U.S. only has 16% share of that market.

“There’s a lot of potential for growth in Vietnam, and we’re trying to get into their market with with some high-quality soybean meal and also soybeans.” says David Struck, a farmer from Wolsey, S.D.

The drive to grow meal exports is a result of the 30% expansion of the soy processing industry in the Midwest to crush for oil for biofuels.

“We’re crushing for the oil now in the United States so the meal supply is going to get larger,” Struck says.

U.S. soybean meal exports are on the rise. This year exports are projected at nearly 16 million metric tons, but volume could double quickly, according to Scott Ritzman, Ritzman Consulting.

“If all the crushed plants that were announced actually come to fruition, we might be at a 22 to 23 million metric ton market,” he says.

The farmer delegation told Vietnam buyers the meal surplus will drive U.S. prices down compared with South America. The other selling points of U.S. meal include lower freight cost, consistency, sustainability and nutritional value.

There is room to grow and that’s why U.S and South Dakota farmers want to build strong relationships with their customers through trade missions.

“I think it’s great for us as producers and board members to go out and shake those people’s hands and say thank you and let’s grow together because when they make money, we make money,” says Derrick Scott, a Geddes, S.D., farmer.

U.S. Rejects Vietnam’s Bid for ‘Market Economy’ Status in Blow to Trade Ties

Tue, 06 Aug 2024 13:45:15 GMT

The U.S. rejected Vietnam’s bid for ‘market economy’ status in blow to trade ties. The classification would have boosted exports and reduced tariffs on goods from country that is rising supply chain alternative to China.

The U.S. Department of Commerce cited several reasons for maintaining Vietnam’s classification as a “non-market economy” (NME):
• State intervention: Despite economic reforms, the U.S. Commerce Department noted that there is still extensive government involvement in Vietnam’s economy. This includes control over pricing, currency, and trade practices, which distort market prices and costs.
• Anti-dumping concerns: The NME status allows the U.S. to use prices and costs from third countries to calculate anti-dumping duties on Vietnamese imports. This practice is used to counteract what the U.S. sees as unfair trade advantages stemming from Vietnam’s economic structure.

The Decision has Several Consequences:

• Tariffs and duties: Without market economy status, Vietnamese goods are subject to higher anti-dumping duties, making them less competitive in the U.S. market.
• Investor uncertainty: The rejection introduces uncertainty for foreign investors, potentially impacting foreign direct investment (FDI) in Vietnam.
• Negotiation power: Vietnam may find it challenging to negotiate favorable tariff rates and trade terms with the U.S.

The U.S. remains cautious about Vietnam’s economic practices and the potential for Chinese companies to use Vietnam as a backdoor to circumvent U.S. tariffs.

The Vietnamese government expressed regret over the decision, highlighting the positive economic reforms and policy commitments it has made. Vietnam’s Ministry of Industry and Trade argued that the upgrade would have been a fair recognition of these efforts.