Thai are Sp Co. Garment Factory in Thu Duc, Ho Chi Minh, Vietnam, on June 21, 2025.
Daniel Ceng | Anadolu | Getty images
The president of the United States, Donald Trump, announced a commercial pact with Vietnam on Wednesday, but their few details have left economists asking what it would mean for the flow of Chinese products redirected by the country.
Trump said Wednesday that there would be a 20% rate on Vietnam’s assets and a 40% “transmission” rate on the goods that originate in another country and transferred to Vietnam for the final shipment to the United States.
Chinese manufacturers have used transmission to neglect strong tariffs of their direct shipments to the United States, using Vietnam as an important transhipment center.
The White House commercial advisor, Peter Navarro, claimed that around a third of Vietnam’s exports are redirected from China and described Vietnam as “essentially a colony of communist China” in an interview with Fox News in April.
The last agreement is an apparent strike against such redirected shipments from China, said Yao Jin, associate professor of supply chain management at the University of Miami.
But enforcing the specific levies on transbios will be a difficult task for Hanoi, since it will have to define the scope of what would qualify as “done in Vietnam” and what constitutes the transhipment.
“If it only applies to pure transforations (goods sent from China to the United States through Vietnamese ports, without any local assembly), then there should hardly be any impact on Vietnam,” Frederic Neumann, HSBC Bank chief economist, said on Friday.
However, if the 40% tariff applies to “all Vietnamese goods with a minimum participation of Chinese components, interruptions could be significant,” said Neumann.
Similarly, Dan Wang, director of China in Eurasia Group, said that “it is not clear how this would work, presumably the burden falls to Hanoi on the issuance of rules of origin rules, and what level of Chinese components, if that is the metric, it will be considered too much.”
As more Chinese manufacturers moved their production to Vietnam since Trump’s first mandate, Vietnam’s commercial surplus with the United States tripled a $ 123.5 billion record last year since less than $ 40 billion in 2018, according to the United States Census Office.
Template for others?
The agreement made Vietnam in the last country, after the United Kingdom and China, to ensure Trump’s commercial relief and will probably serve as an important reference for other nations of Southeast Asia in their current commercial negotiations, analysts said.
Many countries are competing to reach commercial agreements with the US. Uu. Before the 90 -day break expires on July 9, when Trump’s “reciprocal” tariffs are ready to enter into force.
Many nations of Southeast Asia had benefited from the last commercial war of the United States-China during Trump’s first mandate by serving as alternative manufacturing and export centers.
The judgment of a country on its exposure to the markets of the United States and China, the level of transhipment activity in that country and the implications for local industries, said Lynn Song, the main economist of China in ING.
China’s shipments to many Southeast Asian countries this year rose to a customs height record showed that Chinese customs data As exporters diverted shipping to alternative markets to sell to local markets or transford to the United States
If the Vietnam and the United Kingdom trade agreements are an indication, the future agreements of the United States with other countries will probably imply measures to control the transford, greater commitments to buy the US goods. UU. And “provisions aimed at press CNBC.
Strict safety requirements for steel and pharmaceutical products in the United States-Redal Agreement are widely seen as an attempt to squeeze China from the British supply chain.
China turns on fire
China delayed the American-Vietnam trade agreement on Thursday for the concerns that the Trump administration would use its continuous tariff negotiations with third countries to stop its exports.
The country’s Ministry of Commerce said Thursday that it was “carrying out an evaluation” of the agreement, urging other countries not to seek an agreement with Washington at the expense of China’s interests.
It is likely that China can see Washington as the use of “reciprocal tariff negotiations so that third countries try to squeeze China from supply chains,” Olson added. Wait for Beijing to press countries that do not access US demands and reject that practice in negotiations with Washington.
That said, Beijing will probably prevent any concrete action from taking until the details of the agreement are clarified, experts said while waiting to see how the commercial agreements of other countries are formed.
“Turning the table on a single Vietnam Commercial Agreement would be reckless,” said the Song of ING.
In recent days, the United States and China have returned a series of restrictive measures from each other in honor of the commercial consensus reached in Geneva, Switzerland, in May. Since then, Washington has raised export restrictions in ethane, chips design software and reaction motor parts, while Beijing is configured to accelerate approvals for rare earth exports.
Both parties reached a commercial framework last month after the conversations in London, which remains in force until mid -August, with Chinese products that currently face rates of around 55%.
The agreement between the United States and Vietnam also implies that it is unlikely that the final tariffs on Chinese products will fall under that 40%threshold, according to Nick Marro, the main economist of the Economist Intelligence Unit, since the lowest tasks in the direct shipment of China could encourage companies to change the production there, rent the broader objective of the Trump administration of China’s industrial capacity.
