On July 2, 2025, President Trump announced that the United States and Vietnam have reached agreement on a loose framework for a trade deal.
Building on recent trade deals announced by the Trump administration with the United Kingdom and China, President Donald Trump has recently announced that the United States and Vietnam have reached a preliminary agreement on a potential bilateral trade deal. In this Alert, we discuss recent developments relating to all three trade deals and the status of various legal challenges to tariffs that President Trump has ordered pursuant to the International Emergency Economic Powers Act (IEEPA) and we highlight key takeaways for businesses navigating the rapidly evolving trade landscape.
Announcement of Framework for U.S.-Vietnam Trade Deal
On July 2, 2025, President Trump announced that the United States and Vietnam have reached agreement on a loose framework for a trade deal. While no official text has been released as of this writing, details emerging from the White House indicate that Vietnam has agreed in principle to cooperate with the United States in preventing its territory from being used to transship Chinese goods seeking to evade U.S. tariffs. Under this framework, Vietnamese exports to the United States will face a 20 percent tariff, replacing the lower 10 percent rate applied during the prior tariff pause. Goods suspected of transshipment from China through Vietnam will be subject to a heightened 40 percent tariff. Vietnam’s customs authorities are expected to begin technical consultations to negotiate binding provisions and enforcement mechanisms. These developments send a clear political signal of intent to tighten export controls and curb tariff evasion.
Update on the U.S.-U.K. Economic Prosperity Deal
On June 16, 2025, President Trump issued Executive Order 14309—Implementing the General Terms of the U.S.-U.K. Economic Prosperity Deal. As described in EO 14309, the trade deal expands U.S. companies’ access to British markets while introducing new compliance requirements tied to national security. The deal increases market access for American agricultural exports, including beef and ethanol, by reducing or eliminating longstanding nontariff barriers in the United Kingdom. It also establishes an annual quota allowing up to 100,000 U.K.-origin vehicles to enter the United States at a reduced 10 percent tariff, down from the prior 25 percent rate, provided that U.K. automakers meet U.S. supply chain security requirements. This automotive quota took effect on June 30, 2025, seven days after the order’s publication in the Federal Register, with additional modifications to the Harmonized Tariff Schedule to follow.
EO 14309 also outlines a framework for future quotas on steel and aluminum imports from the United Kingdom at most-favored-nation rates, contingent on U.K. producers demonstrating compliance with American supply chain and ownership standards. Immediate tariff-free bilateral trade in certain aerospace products is established to strengthen supply chains in that sector. In addition, the agreement includes a commitment to negotiate preferential treatment for U.K. pharmaceutical products pending the outcome of a Section 232 national security investigation. These provisions offer significant opportunities for U.S. businesses across the agriculture, automotive, aerospace and pharmaceutical sectors in the U.K. following periods of uncertainty. However, strict adherence to security-related compliance requirements will be necessary to access the benefits of the deal.
Developments in U.S.-China Trade Talks
Since early June, the United States and China have engaged in intense negotiations aimed at ironing out details relating to the trade deal that the two countries announced on May 12, 2025. On June 11, 2025, the two countries announced a framework agreement to ease export controls and address trade tensions. More recently, on June 26, 2025, the two countries announced an agreement pursuant to which China would ease restrictions on rare-earth exports and the United States would lift certain export controls relating to China; however, specific details relating to this agreement have yet to be publicly released.
Pursuant to the trade deal announced on May 12, both countries have reduced the previously imposed special tariffs by 115 percent. Specifically, China reduced its special tariffs on U.S. goods from 125 percent to 10 percent. For its part, the United States lowered the IEEPA-based tariffs on Chinese goods from a cumulative 145 percent to 30 percent (i.e., a reduction of the reciprocal tariff rate applicable to China from 125 percent to 10 percent plus the IEEPA-based fentanyl tariff rate of 20 percent). However, other special tariffs applicable to China will remain in effect (e.g., Section 232 and Section 301 tariffs). This reduction in special tariff rates is scheduled to remain in effect until August 11, 2025, although it is quite possible that the two countries will agree to extend this deadline.
Ongoing Litigation Relating to IEEPA-Based Tariffs
While the administration continues to pursue new trade agreements, multiple legal challenges have been filed contesting the legality of the tariffs imposed pursuant to IEEPA. The plaintiffs in some of the cases—including importers such as V.O.S. Selections, Genova Pipe and Learning Resources, as well as the state of Oregon and various other states—have asserted that the IEEPA-based tariffs exceed the statutory authority granted to the president, arguing that trade deficits, immigration concerns and fentanyl-related issues do not constitute the “unusual and extraordinary threat” required under IEEPA. In consolidated cases, the U.S. Court of International Trade (CIT) granted summary judgment, holding that the president’s emergency declarations did not establish a qualifying “unusual and extraordinary threat” under IEEPA and that the tariffs therefore exceeded the authority granted by Congress. See V.O.S. Selections v. United States, Slip Op. 26-66, Consol. Ct. No. 25-00015 (Ct. Int’l Trade May 28, 2025). On the following day, the U.S. District Court for the District of Columbia similarly ruled that the emergency declarations were insufficient under IEEPA and that the tariffs violated constitutional separation of powers principles. See Learning Resources. Inc. v. Trump, No. 1:25-cv-01248-RC, 2025 WL 1525376 (D.D.C. May 29, 2025).
However, enforcement of these two rulings has been stayed pending appeals before the U.S. Court of Appeals for the Federal Circuit (relating to the ruling issued by the CIT) and the U.S. Court of Appeals for the D.C. Circuit (relating to the decision issued by the U.S. District Court for the District of Columbia). Decisions in these appeals are anticipated to be issued by late summer or early fall. Until the appellate proceedings are finally resolved, including the possibility of appeal to the U.S. Supreme Court, the contested tariffs remain in effect and importers are required to continue paying the applicable duties.
Key Takeaways and Next Steps
Taken together, these agreements and frameworks represent significant, though still incomplete, steps toward reshaping U.S. trade relationships with three major economic partners. However, volatility remains very high. None of these frameworks has yet produced a fully binding legal agreement, and critical details, particularly regarding long-term tariff levels and enforcement measures, remain unresolved.
It also should be noted that the 90-day reciprocal tariff pause is set to expire on July 9, 2025. Companies that import products from countries that have not yet reached trade deals with the United States should prepare for potential increases in tariff rates to previously announced levels if negotiations do not yield a comprehensive trade deal by the deadline or the pause is not extended.
Businesses looking to benefit from new opportunities in the agriculture, pharmaceuticals, manufacturing, and aerospace and defense sectors should pay close attention to the stringent supply chain security requirements embedded in these new trade deals, especially for automotive, steel, aluminum and pharmaceutical products. Companies sourcing from Vietnam or routing supply chains through Vietnam should also monitor forthcoming technical consultations and potential enforcement measures that could dramatically affect tariff exposure. Further executive actions may be announced as soon as July 8, when additional decisions on reciprocal tariffs could reshape the trade landscape.
About Duane Morris
In light of the constantly evolving nature of the Trump administration’s tariff policies, Duane Morris has formed a Tariff Mitigation Task Force, which consists of a multidisciplinary group of professionals with extensive experience in industries heavily impacted by tariffs, including automotive, construction, energy, fashion, retail, consumer products, life sciences, pharmaceuticals, electronics and semiconductors. The task force provides assistance to clients in developing develop tariff mitigation strategies that optimize supply chains, minimize disruptions and identify opportunities to maximize client profits through tariff-related cost savings.
For More Information
If you have any questions about this Alert, please contact Geoffrey M. Goodale, Hope P. Krebs, Thomas R. Schmuhl, Eduardo Ramos-Gómez, Oliver Massmann, Raul Rangel Miguel, Laura M. González Alemán, any of the attorneys in our firm’s Tariff Mitigation Task Force or the attorney in the firm with whom you are regularly in contact.
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