this post was submitted on 05 Jul 2025
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I don't think i follow your logic, theoretically this would reduce the trade deficit. The US would be importing less from Vietnam because the people in the US have to pay 20% more, and the US would be exporting more to Vietnam as the price of the US good would be cheaper then they were before with no duties.
The US would be exporting more and importing less so the trade deficit will go down.
I don't think that's how it will work on reality as even with that 20% goods produced in Vietnam will still be cheaper then those made in the US. Same with US goods in Vietnam, where even if they don't cost any more then the equivalent Vietnamese good due to tarrifs, they'll still cost a lot more due to labor and shipping costs.