The United States will place a lower-than-promised 20% tariff on many Vietnamese exports, Donald Trump said on Wednesday, cooling tensions with its tenth-biggest trading partner days before the U.S. president could raise levies on most imports.

President Donald Trump’s new trade deal with Vietnam sends a clear signal about where US tariffs on Chinese goods might ultimately land, as talks between Washington and Beijing continue following their recent truce.

Trump’s looming tariffs on Vietnamese goods threatens to upend the country's US export-heavy economy. To counter this, Vietnam must diversify its export markets to reduce dependence on the United States,