VCI Legal – 30 October, 2025

The United States of America and the Socialist Republic of Vietnam have reached a consensus on the Framework for a Reciprocal, Fair, and Balanced Trade Agreement (“Agreement”), aimed at strengthening bilateral economic relations and expanding market access for each other’s exports.

This Agreement builds upon the long-standing foundation of economic cooperation between the two nations, particularly the U.S. –Vietnam Bilateral Trade Agreement signed in 2000 and effective since 2001.

1. Contents of Framework for a Reciprocal, Fair, and Balanced Trade Agreement

Key elements of the Agreement include:

• Market Access: Vietnam will grant preferential market access to most U.S. agricultural and industrial products.
• Tariff Policy: The U.S. will maintain a 20% reciprocal tariff as stipulated in Executive Order No. 14257 (April 2, 2025), as amended, on goods originating from Vietnam. Certain products listed in Annex III of Executive Order No. 14356 (September 5, 2025) – “Adjusting Countervailing Tariffs for Like-Minded Partners” – will be eligible for a 0% reciprocal tariff.
• Non-Tariff Barriers: Both sides will cooperate to address non-tariff barriers in priority sectors. Vietnam has committed to:
  • Recognize vehicles manufactured under U.S. safety and emission standards;
  • Resolve licensing issues for U.S. medical device imports;
  • Streamline regulatory and approval procedures for U.S. pharmaceuticals;
  • Fully implement its international obligations on intellectual property;
  • Address U.S. concerns regarding conformity assessment procedures.
• Agricultural Trade: Both sides will work to prevent and address barriers to U.S. agricultural products in Vietnam through a joint monitoring mechanism and recognition of certificates issued by U.S. regulatory agencies.
• Digital Trade, Services, and Investment: The two countries will align commitments in these areas while continuing discussions on intellectual property, labor, environment, customs, regulatory reforms, and the role of state-owned enterprises that may distort competition.
• Supply Chain Resilience: Both sides commit to enhancing supply chain resilience, coordinating on export control measures, and addressing tax avoidance and circumvention practices.

Additionally, the U.S. and Vietnam acknowledged several commercial agreements recently concluded between their businesses:

• Vietnam Airlines signed a contract with Boeing to purchase 50 aircraft worth over USD 8 billion;
• Vietnamese enterprises signed 20 memoranda of understanding with U.S. partners to import agricultural products valued at more than USD 2.9 billion.

In the coming weeks, the two sides will continue discussions to finalize the Agreement, preparing for its official signing and domestic ratification procedures to bring the Reciprocal, Fair, and Balanced Trade Agreement formally into effect.

2. Prospects and Challenges

The United States’ endorsement of the framework signals a shift toward a more adaptable and pragmatic trade stance with Vietnam, reflecting Hanoi’s rising geopolitical relevance within Washington’s Indo-Pacific strategy.

During the first nine months of 2025, bilateral trade surged to USD 126.4 billion, up 27.3% compared with the same period in 2024. Vietnam’s exports to the U.S. expanded by 27.7% to USD 112.8 billion, representing 32.3% of the country’s total exports, while imports from the U.S. increased 23.6% to USD 13.66 billion, indicating Vietnam’s efforts to foster a more balanced trade relationship [1]. Nevertheless, the trade surplus of nearly USD 100 billion remains a contentious issue that will require careful handling in future negotiations.

The Joint Statement represents an initial step toward the comprehensive trade agreement, but the road ahead will likely involve complex discussions on non-tariff barriers, intellectual property rights, and sustainability obligations. For Vietnam, the main challenge lies in reconciling market liberalization and trade balance objectives while protecting domestic industries and diversifying export destinations to mitigate dependence on the U.S. market.

Still, the announcement of the Joint Statement stands out as a positive milestone amid global trade turbulence, reinforcing Vietnam’s enhanced diplomatic standing and negotiation capability. If successfully finalized, the Reciprocal, Fair, and Balanced Trade Agreement could not only solidify economic ties with Vietnam’s largest export market but also lay a durable foundation for the continued growth of the Comprehensive Strategic Partnership between Vietnam and the United States.

About VCI Legal:

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