Retailers Avoid Worst-Case Vietnam Tariff, But Consumer Prices Still at Risk

Ho Chi Minh City — U.S. retailers are relieved that the Trump administration’s trade deal with Vietnam won’t include the originally proposed 46% tariff. Instead, a 20% duty is expected, offering some short-term relief. But many industry leaders warn the impact on consumer prices may still be significant.

Vietnam had become a key sourcing hub after earlier China tariffs, and today ranks as the second-largest supplier of apparel and footwear to the U.S. A 46% tariff, as first proposed in April, would have severely disrupted supply chains. Though the 20% duty is more manageable, it still doubles the current rate and is expected to drive up prices for clothing, shoes, and accessories.

Executives from brands like Nike, Gap, and American Eagle say the added costs will likely be passed on to consumers. Some firms have already raised prices earlier this year due to China tariffs.

Industry experts also point out that other Southeast Asian countries, like Cambodia, Bangladesh, and Malaysia, may soon reach similar deals with Washington, facing new tariffs ranging from 10% to 40%.

While the final implementation details remain unclear, the outlook has many in retail worried. “It’s not good for the consumer,” said Picnic Time CEO Paul Cosaro. “It’s just more money coming out of their pockets.”