A new US-Vietnam trade deal has reduced tariffs on Vietnamese exports to the US from 46% to 20%. However, goods that are relabeled in transit, known as 'transshipped' goods, will incur a 40% tariff. This measure aims to limit attempts by other countries to bypass US tariffs through Southeast Asian nations. Additionally, a similar agreement with Indonesia lowers tariffs from 32% to 19%, underlining concerns over rerouted goods from higher tariff countries. Trade adviser Peter Navarro characterized Vietnam as a conduit for Chinese products, highlighting the complexities of trade relations.
Earlier this month, Washington announced a new US-Vietnam trade deal, under which Vietnamese exports to the US will face a 20% tariff, down from the threatened 46%. However, 'transshipped' goods would be subject to a 40% levy.
The US tariffs on transshipments are widely seen as a push to curb other countries' economic relations with China, as Beijing has been accused of re-routing goods.
In April, Trump's influential trade adviser Peter Navarro dubbed Vietnam 'essentially a colony of communist China,' emphasizing the evasion of tariffs through relabeled goods.
In 2024, Vietnam imported $144 billion worth of goods from China and exported $136.6 billion worth of goods to the US, reflecting significant trade relationships.
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