President Donald Trump announced a trade agreement with Vietnam this week, slashing the threatened 46% tariff on Vietnamese imports to 20% and granting duty-free entry for U.S. goods. The deal comes as Washington intensifies efforts to redraw global supply chains and reduce America’s reliance on Chinese manufacturing.
A key provision imposes a steep 40% duty on goods rerouted through Vietnam—a route often used by Chinese exporters to dodge U.S. tariffs. China has taken notice. The Ministry of Commerce issued a sharp warning, saying, “China firmly opposes any party reaching a deal at the expense of Chinese interests … If this happens, China will never accept it and will resolutely counter it to safeguard its legitimate rights and interests.”
Analysts say the punitive tariff could discourage Chinese firms from rerouting products through Vietnam, thereby further increasing the complexity of supply chains moving across Asia. By signaling that it will crack down on goods routed through Vietnam, Washington hopes to close loopholes that have allowed Chinese manufacturers to quietly move products into the U.S. through neighboring countries.
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