The United States will impose a 20% tariff on many Vietnamese exports, significantly lower than the previously threatened 46%, President Donald Trump announced Wednesday, easing trade tensions with its tenth-largest trading partner just days before a planned tariff increase.

Speaking after a conversation with Vietnam’s top leader, To Lam, Trump revealed that Vietnamese goods exported to the U.S. will face a 20% tariff, while trans-shipments—goods routed through Vietnam from third countries to avoid higher tariffs—will be hit with a 40% levy. This measure targets products not originally made in Vietnam but shipped through the country to bypass trade penalties, especially those aimed at China.

“It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam,” Trump said on his social media platform, Truth Social.

The announcement comes ahead of a July 9 deadline when Trump had planned to escalate tariffs on most imports as part of his administration’s broader economic policy. The earlier plan would have imposed tariffs as high as 46% on Vietnamese goods.

While talks with other countries like India are reportedly underway, recent truces with Britain and China have been limited in scope. The deal with Vietnam marks a notable easing in U.S. trade policy toward Southeast Asia.