The United States and Vietnam have signed a trade deal that aims to curb Chinese goods rerouted through Vietnam. The pact includes a 20% tariff on goods from Vietnam and a 40% “transshipping” tariff on goods originating in another country and transferred to Vietnam for final shipment to the US.
The agreement is seen as an attempt to counter Chinese manufacturers’ use of transshipment to sidestep hefty tariffs imposed on direct shipments to the United States. Vietnamese exports that are rerouted from China will now face new levies, but experts warn that enforcing these measures could be challenging.
“Hanoi needs to define what constitutes ‘made in Vietnam’ and what is considered a transshipment,” Frederic Neumann, chief Asia economist at HSBC Bank, said. “If the tariff applies to all Vietnamese goods with even a minimal share of Chinese components, disruptions could be significant.”
The deal also has implications for China’s trade relations with other countries. Beijing has expressed concerns that the US is using its tariff negotiations with third countries to curb its exports. However, experts believe China will hold off on taking concrete action until details of the deal are clarified.
Vietnam’s trade surplus with the US has more than tripled since Trump’s first term, and this agreement makes Vietnam the latest country to secure trade relief from the US president. Other Southeast Asian nations may follow suit in their ongoing trade negotiations.
The US is racing to sign trade deals before a 90-day pause expires on July 9, when reciprocal tariffs are set to take effect. The deal with Vietnam aims to rein in transshipment and increase purchase commitments of US goods, while also pressuring China.
Source: https://www.cnbc.com/2025/07/04/trumps-vietnam-pact-targets-china-raises-questions-than-answers.html