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U.S. President Donald Trump holds up a chart displaying reciprocal tariff rates by country during an announcement in the White House Rose Garden on July 2. / AP–Yonhap News

U.S. President Donald Trump announced on July 2 that Washington has reached a trade agreement with Vietnam, making it the first Asian country and second overall—after the United Kingdom—to finalize a deal under the Trump administration’s reciprocal tariff policy.

Trump made the announcement via Truth Social, stating that the U.S. will impose a 20% tariff on Vietnamese imports, down from the previous 46% introduced in April. In return, Vietnam has agreed to allow U.S. exports into its market completely tariff-free.

“It is my honor to announce a trade agreement with Vietnam following a conversation with To Lam, General Secretary of the Communist Party of Vietnam,” Trump wrote, calling it “a great deal for both nations that will enhance our cooperation.”

Outlining the terms, Trump said Vietnam will apply a 20% tariff on products shipped directly to the U.S., and a 40% tariff on goods transshipped through Vietnam from third countries. Meanwhile, the U.S. will enjoy full access to the Vietnamese market without duties.

“In exchange, Vietnam has agreed to something it has never done before—granting the United States full access to its market,” Trump said. “That means we will be able to sell American goods in Vietnam with zero tariffs.”

He added that he expects strong demand in Vietnam for American-made vehicles, especially large-engine cars and SUVs, which are already popular among U.S. consumers.

The agreement with Vietnam follows a June deal with the United Kingdom. The Trump administration is negotiating similar agreements ahead of the July 8 deadline, which marks the end of a 90-day grace period Trump granted after announcing reciprocal tariffs on 57 economic entities (56 countries and the EU) on April 2. China was excluded from the temporary suspension.