【By GuanchaZhe Wang, Juan Jiaqi】

With less than a week until the July 9 "reciprocal tariff" negotiation deadline, on Wednesday (July 2), U.S. President Trump announced that he had reached a trade agreement with Vietnam, under which Vietnam's products exported to the United States would be subject to a 20% tariff, lower than the initially threatened 46%.

He also said that any goods deemed "transshipped through Vietnam" would be subject to a 40% tariff. This approach emulates provisions in existing U.S.-Mexico and U.S.-Canada trade agreements, aiming to target products containing components from other countries, transshipped or merely assembled in Vietnam before being exported to the United States.

Although the details of the current agreement remain unclear, particularly the definition and implementation standards of "transshipment," media outlets such as The New York Times and The Washington Post noted on July 3 that this clause clearly targets China. Economists and regional analysts believe that the relevant clauses in the U.S.-Vietnam trade agreement highlight one of the core goals of the Trump administration in Asia: curbing trade with China and pushing it out of the supply chain.

The report suggests that this approach of politicizing normal trade issues and maliciously excluding China poses a significant challenge for Vietnam, which shares a border with China and has deeply integrated industrial chains.

Roland Rajah, chief economist at the Lowy Institute in Australia, pointed out that the final definition of "transshipment" by the Trump administration will have a major impact on Vietnam's export capacity.

He analyzed, "If the U.S. definition of 'transshipment' is too broad, and any Chinese components in Vietnamese products, regardless of proportion, are counted, it would cause much more trouble."

Pham The Anh, head of the Department of Economics at the University of National Economics in Hanoi, added that this would also "anger" Vietnam's largest trading partner, China. He said that Vietnam had been cautious during the negotiations, but now "finds itself in a difficult position."

The Washington Post reported that during the U.S.-Vietnam negotiations, Vietnam has already begun to strengthen checks on product origins.

If the new "transshipment" rules become stricter, Huong Le Thu, deputy director of the Asia program at the International Crisis Group (ICG), expressed concern, saying, "Vietnam is walking a tightrope... any mechanism could easily anger China." China has repeatedly warned that if its interests are threatened, there will be consequences.

Deborah Elms, director of trade policy at the Hinrich Foundation, bluntly stated that the core intention of the U.S. was to "exclude China," but for countries like Vietnam, complying with U.S. demands carries geopolitical risks.

"This is a complete gamble, betting on how the U.S., China, and domestic companies will react," she said.

On July 3, both the Chinese Ministry of Foreign Affairs and the Ministry of Commerce clearly stated that the U.S. imposing so-called "reciprocal tariffs" on global trade partners is a typical example of unilateral bullying. China has consistently opposed this. China has noticed the situation and is conducting an assessment. China's position has always been consistent, and we welcome all parties to resolve trade disputes with the U.S. through equal negotiations, but resolutely oppose any party achieving deals by sacrificing China's interests. If such situations arise, China will firmly counteract to safeguard its legitimate rights and interests.

A worker ironing clothes in a Vietnamese factory. Media outlet

Vietnam was an early winner in the first round of the U.S.-China trade war, attracting a large number of Chinese manufacturers in the clothing, electronics, and home appliance industries over the years. This shift accelerated Vietnam's economic growth, making the country an export powerhouse.

Data from the U.S. Census Bureau shows that since 2018, Vietnam's exports have nearly tripled, rising from less than $50 billion to about $137 billion in 2024, accounting for nearly a third of its total exports.

During the same period, U.S. exports to Vietnam only increased by about 30%, from less than $10 billion in 2018 to slightly above $13 billion last year.

This has made Vietnam a target for U.S. pressure. U.S. officials often hype Vietnam's large trade surplus with the U.S. and accuse the country of allowing large-scale transshipment of Chinese goods, trying to redefine it as "illegal transshipment."

The Washington Post reported that, for example, in the consumer electronics industry, Vietnam has become an important production hub for tablets, smartphones, and earphones. Many of these Vietnamese factories are controlled by Chinese capital, using the Chinese production system, with parts mostly imported from China. This is a natural result of the regional supply chain, typically not considered "transshipment" and compliant with Vietnamese regulations, but deliberately misrepresented by Trump supporters like White House trade advisor Peter Navarro as "illegal transshipment."

Some speculate that the U.S. tax on transshipped goods may force manufacturers to move more production capacity to Vietnam, thus diverting Chinese business activities. However, Xu Tianchen, senior economist at the Economist Intelligence Unit (EIU) in Beijing, believes it is not that simple.

"It's like whack-a-mole," Xu said. "The bigger structural issue is that China is the world's largest producer, and the U.S. is the world's largest consumer... without Vietnam, other channels would emerge." He added that Indonesia and Morocco might become alternatives.

Matt Priest, CEO of the Footwear Distributors & Retailers of America (FDRA), told The New York Times that ironically, if restrictions on Chinese components are too strict, U.S. companies might move their production out of Vietnam.

"If compliance requirements are too cumbersome or difficult to meet, companies won't choose to expand procurement in Vietnam," he added. "If China remains price-competitive, they might even return to China."

Huong Le Thu of the International Crisis Group also mentioned that the execution of the rules is another issue.

Over the past few decades, Vietnam has established an economic system closely integrated with global trade, with nested supply chains that are difficult to disentangle. Huong Le Thu said, "Tracking, tracing, and enforcing—this is a daunting task for any country, and Vietnam is no exception."

The Washington Post mentioned that Vietnam is the first Asian country to reach a trade agreement with Trump. Quoc Tuan Ho, a researcher at the University of Bristol, pointed out that the U.S.-Vietnam agreement could serve as a model for other Asian countries, and therefore is closely watched by China.

"We know that if the details of the disclosed agreement harm China's interests, China will certainly respond," he added. "This is not just a problem for Vietnam, but also for many countries facing similar issues."

According to The New York Times, in addition to Vietnam, Trump's trade negotiators are also pressuring other export-oriented Southeast Asian countries like Indonesia and Thailand to reduce Chinese elements in their supply chains, conduct reviews of foreign investments, and prevent Chinese enterprises from entering Thailand. They even pressured some countries to consider implementing export controls on technologies like semiconductors. However, restricting China's trade in the region could trigger a chain reaction, harming the interests of Southeast Asian countries closely linked to China's economy.

"The message from the Trump administration is, 'If you want to be a trade partner of the U.S., we need to see strategic decoupling from China,' " questioned Steven Okun, CEO of APAC Advisors, a public affairs consulting company. "But the question is, will these countries agree?"

Media reports indicate that many Asian governments are concerned that China may respond strongly to agreements that isolate Chinese enterprises. This move by Washington could push some countries deeply integrated with China's economy into Beijing's embrace. Some countries have even started discussing whether to establish a separate supply chain for the U.S. market.

Pavida Pananond, professor of international business at Thammasat University in Thailand, admitted, "China is a very important economic power, not only as a country importing our goods, but also as a source of investment and an export destination. We must carefully balance between the two superpowers."

This article is an exclusive contribution from GuanchaZhe, and without permission, it cannot be reprinted.

Original: https://www.toutiao.com/article/7523067793139401262/

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