3 Jul 2025
The US-Vietnam trade deal is aimed at isolating China primarily by targeting the use of Chinese components in goods exported from Vietnam to the US. The deal imposes a tiered tariff system where Vietnamese exports containing Chinese inputs face higher tariffs—20% generally, and up to 40% on goods suspected of being transshipped from China through Vietnam with minimal processing. This is designed to prevent Chinese products from bypassing US tariffs by routing them through Vietnam, a practice that increased after earlier US-China trade tensions led companies to relocate production to Vietnam.
The US strategy behind this deal is part of a broader effort to reshape global supply chains into "trusted" networks that exclude Chinese firms and reduce China's role in international trade. The Trump administration has pushed trading partners like Vietnam to cut back on imports from China and control their supply chains more tightly to avoid facilitating Chinese goods entering the US market indirectly.
