Vietnam helped China’s firms avoid US tariffs. Trump just put an end to that

The US president’s reciprocal tariffs not only impose steep tariffs on China, but also popular transshipping destinations used by Chinese exporters

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Vietnamese workers stitch garments inside a factory in Ho Chi Minh City. US tariffs on Vietnam also pose a threat to Chinese exporters that have shifted production to the country. Photo: AFP

Published: 7:00pm, 3 Apr 2025

Washington’s sweeping new reciprocal tariff regime poses a serious threat to China’s export machine – and its effects will go far beyond the steep new duties imposed on China itself.

Chinese exporters will also be affected by US tariff hikes on third countries such as Vietnam, which have become popular destinations for companies to transship goods and circumvent US duties aimed at China.

Countries across Southeast Asia are scrambling to placate Washington and avoid facing the full impact of the new US tariffs, which Trump announced on Wednesday – a day he dubbed America’s “Liberation Day”.

Officials in Vietnam – whose economy has benefited from a surge of investment from manufacturers seeking to diversify their supply chains away from China over the past seven years – have already made several concessions, with the country facing a tariff hike of 46 per cent.

On Monday, Vietnamese authorities lowered tax rates on imports of American automobiles, wood products, ethanol and six agricultural products, with wooden items now charged a zero per cent rate, the state-run Vietnam News Agency reported.

The country’s prime minister, Pham Minh Chinh, has also ordered the formation of a task force to respond to the tariffs, while the country has pledged to buy more American raw materials, machinery and aircraft.