Vietnam has secured a tariff agreement with the US that results in a 20% tariff on many goods, avoiding a potential 46%. In return, US products will face no tariffs when entering Vietnam. A significant concern involves a 40% tariff on transshipments, intended for products from China passing through Vietnam. Businesses fear the politicization of what defines transshipment and its broad application could lead to unfair targeting. As a key manufacturing hub, Vietnam's goods often incorporate inputs from other countries, complicating compliance with the new agreement.
Vietnam is facing a tariff of 20% for many goods, avoiding a harsher 46% levy, while US products will enter without tariffs.
Businesses worry that the term transshipment could be politicized, potentially leading to unfair targeting of goods due to broad definitions.
It is unrealistic to expect most Vietnamese goods, aside from agricultural products, will be made entirely in Vietnam.
The agreement aims to apply pressure on China while benefiting Vietnam, which has emerged as a significant manufacturing hub.
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