🔹 The United States and Vietnam have agreed on a dual-tier tariff system aimed at preventing the abuse of Vietnam as a transit hub for Chinese goods entering the US market.

🔹 Goods genuinely manufactured in Vietnam will face a 20% tariff, while goods merely transiting through the country will be subject to a 40% tariff.

🔹 These measures respond to the growing volume of exports falsely labeled as "Made in Vietnam" but effectively originating from China.

Tighter rules follow years of trade diversion

The new customs framework is a response to the increasing trend of Chinese companies bypassing US tariffs by routing shipments through Vietnam and other Southeast Asian countries. By moving part of the production or logistics chains, these goods are labeled as Vietnamese, even when critical components are Chinese.

Although technically legal, this practice is misleading. According to data from the Lowy Institute think tank, 28% of Vietnam’s exports to the US in 2022 included Chinese-made components, up from just 9% in 2018.

Economists warn that unless the term “Made in Vietnam” is clearly defined and strictly enforced, Chinese products will continue to slip through via other countries, rendering the tariffs ineffective.

China seeks new routes as Southeast Asia tightens control

The US is concerned that without strict origin rules, the situation won’t improve. That’s why countries like Malaysia, Thailand, and Cambodia are ramping up enforcement:

🔹 Malaysia has centralized the issuance of certificates of origin under the trade ministry and tightened supervision.

🔹 Thailand has listed high-risk items like solar panels and auto parts for closer inspection.

🔹 In Cambodia, export clearance times have doubled as customs now thoroughly check goods headed to retailers like Walmart, Home Depot, and Lowe’s.

By contrast, Indonesia still issues certificates of origin quickly, based only on a letter and a product list—potentially becoming the next weak spot in the system.

Trump seeks to close the backdoor

This new framework follows Trump’s imposition of additional tariffs on April 2, symbolically introduced on Liberation Day. The former—and now current—president has long opposed China’s trade practices and aims to shield American manufacturing.

Both US and Vietnamese officials say the origin rules will soon be finalized. However, unless the system includes rigorous controls and clearly defined rules, traders will find other routes—and Chinese goods will keep flowing into the US.



#TRUMP , #Tariffs , #TradeWars , #china , #TradingCommunity

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