Trump’s New Vietnam Trade Deal Sizes Up China’s ‘Backdoor’ Tariff Evasion

The Trump administration’s new trade deal with Vietnam aims to shut down any “backdoor” routes that allow Chinese goods to circumvent tariffs and flood the U.S. market.

The deal, announced on Wednesday by President Donald Trump, imposes a 40% tariff on goods “transshipped” through Vietnam. Although China was not explicitly mentioned in Trump’s announcement, trade experts say the provision is aimed at limiting Beijing’s ability to use Southeast Asian nations as a way to bypass U.S. trade restrictions.

China has been accused of rerouting shipments to third countries, like Vietnam, in order to evade tariffs imposed on Chinese goods. The practice has reportedly intensified following the Trump administration’s steep “Liberation Day” tariffs, as evidenced by the recent growth of Chinese exports to these countries, according to the Brookings Institution.

“There does appear to be a more strategic intent here by the U.S. to essentially restrict Chinese exports entering the U.S. market via the backdoor,” Frederic Neumann, chief Asia economist for HSBC, told The Wall Street Journal.

The Trump administration finalized