This week, Chinese President Xi Jinping signed approximately 48 agreements with Vietnamese leader To Lam, which some analysts view as an effort to circumvent increasing U.S. tariffs. President Donald Trump criticized this alliance, implying it was a strategy by the two Asian leaders to undermine the United States. “I don’t blame China, I don’t blame Vietnam,” Trump remarked to reporters, suggesting they were potentially conspiring against the U.S.
The specifics of the new agreements between China and Vietnam are not entirely clear, but reports have indicated they may involve collaborations on supply chains, customs inspections, and railway systems. As the trade tensions escalate, President Trump recently imposed a 145% tariff on all Chinese imports, raising concerns about potential economic separation that could increase consumer prices on various goods. Additionally, tariffs on smartphones and computer equipment were adjusted to 20%, with forthcoming tariffs planned for the semiconductor industry.
In retaliation, China has implemented 125% reciprocal tariffs on U.S. imports, intensifying worries regarding the trade war’s impact on American consumers and businesses. Vietnam has also been notably affected by the U.S.’s “Liberation Day” tariffs, facing a 46% blanket tariff on all goods exported to the U.S. market.
Trade expert Isaac Stone Fish commented that Xi Jinping’s visit to Southeast Asia, including stops in Cambodia and Malaysia, appears to be part of a broader effort by Beijing and Chinese companies to bypass U.S. tariffs by using Vietnam and other Southeast Asian countries as intermediaries for exports to the United States. Vietnam is reportedly working to strengthen its relationship with Washington to alleviate some tariffs by curbing trade with China. Efforts to regulate the origins of goods and materials are reportedly underway to address fraud in “Made in Vietnam” labeling, though the specifics of these measures remain unclear.
China-based companies, seeking to evade tariffs, are likely pursuing loopholes that allow them to transship goods through Southeast Asia. Some utilize multiple bookkeeping methods, misclassify items, or process products in Vietnam before labeling them as Vietnamese goods. Customs officials are tasked with preventing these practices from affecting U.S. markets.
In the backdrop of Trump’s previous trade measures, companies such as Foxconn and Luxshare Precision Industry Co., which supply parts for American firms like Apple, have relocated to Vietnam to avoid tariffs. Trump’s administration continues to push for manufacturing to return to the U.S., although experts caution this shift may take time. In 2023, Vietnam exported more goods to the U.S. than any other market, despite importing heavily from China, raising questions about the composition of Vietnamese exports. The White House refrained from commenting on potential retaliatory actions against Vietnam following its agreements with China, emphasizing Trump’s commitment to negotiating trade deals beneficial to American interests.
