A new trade agreement between the United States and Vietnam is sending ripples through Asian export markets, with Indian exporters being advised to take caution, according to a report by the Global Trade Research Initiative (GTRI).

The deal, announced by US President Donald Trump, imposes a flat 20 per cent tariff on all Vietnamese exports to the US, a move that could disrupt Vietnam’s $135 billion export flow and reverse two decades of trade liberalisation.“For Indian exporters eyeing Vietnam as a competitor and partner in regional value chains, the deal presents both cautionary lessons and strategic implications,” the GTRI report stated, according to news agency ANI.The trade pact replaces Vietnam’s 2000 Bilateral Trade Agreement (BTA), which allowed Vietnamese goods preferential access to the US at tariff rates between 2 per cent and 10 per cent. Key sectors like textiles, footwear, seafood, and furniture, which had driven Vietnam’s export growth from $800 million in 2001 to over $135 billion, will now lose that cost advantage.The new deal, as per AFP, also includes a punitive 40 per cent tariff on goods routed through Vietnam but originally manufactured in countries like China, a measure seen as targeting “transshipment” to evade stricter US tariffs.

However, trade experts have raised legal concerns about this provision, warning that it may breach World Trade Organisation (WTO) norms since routing does not change the origin of goods.Trump announced the deal on his Truth Social platform, stating that “Vietnam will do something that they have never done before — give the United States of America total access to their Markets for Trade.” In return, Vietnamese exports face a 20 per cent US tariff, down from a previously proposed 46 per cent but still more than double the original BTA terms.Peter Navarro, Trump’s trade advisor, previously accused Vietnam of being a “colony of China,” alleging that a third of its exports were in fact Chinese goods relabelled to bypass tariffs. While Hanoi confirmed a resolution on reciprocal tariffs, it did not detail the final terms.For India, the timing of this deal is critical. The GTRI report cautions Indian negotiators, who are in the final stages of their own trade talks with the US, to learn from Vietnam’s experience, especially the risks of sudden reversals in tariff concessions, unclear rules on product origin, and flat duty structures that can undercut long-term trade stability.With Washington reshaping its Asia trade strategy, Indian policymakers and exporters are being urged to closely track developments and adapt proactively. The GTRI concluded that understanding the vulnerabilities exposed by the Vietnam deal could help India avoid similar pitfalls in its own trade trajectory.