China knocked the newly announced U.S. trade deal with Vietnam, saying Beijing “firmly opposes” any deal that disadvantages its economy and pledged to take “countermeasures” to protect its own interests.

The trade deal with Vietnam, which President Trump announced on Wednesday, sets the tariff rate on the country at 20 percent, with Vietnam giving the U.S. tariff-free access to its markets.

It also seeks to prevent third countries like China from laundering their exports through Vietnam, imposing a 40 percent tariff on goods that originate from a country with a higher import tax rate and shipped through Vietnam.

“China firmly opposes any deal made at the expense of China’s interests in exchange for so-called tariff exemptions,” a spokesperson for the Chinese Ministry of Commerce said, when asked about U.S. tariff negotiations “with certain countries.”

“Should such a situation arise, China will never accept it and will take resolute countermeasures to safeguard its legitimate rights and interests,” the spokesperson continued.

The spokesperson said China “welcomes efforts” by other countries to “resolve” trade issues with the U.S. “through consultations on the basis of equality.”

“At the same time,” the spokesperson continued, “we urge all parties to stand on the side of fairness and justice and on the right side of history in resolutely upholding international trade rules and the multilateral trading system.”

The president announced the deal with Vietnam on Truth Social, days before the pause on his sweeping county-specific tariffs is set to expire. The only other country to reach a comprehensive trade deal since Trump’s “Liberation Day” tariffs were announced in April is the United Kingdom.

The Chinese official reiterated Beijing’s general disdain for Trump’s “reciprocal” tariffs, which the official called “a typical act of unilateral bullying that seriously undermines the multilateral trading system and disrupts the normal order of international trade.”

“China has consistently and firmly opposed such actions. It has been proved that only by firmly defending its principles and position can a country truly safeguard its lawful rights and interests,” the official said.

The Trump administration reached an agreement with China last week focused on rare earth exports to the U.S., building on previous talks between the two nations that eased tariffs on imports from Beijing.

This week, the Trump administration rescinded some restrictions on the export of chip-design software to China, just weeks after putting the limitations in place.

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Trump didn't just cut a deal with Vietnam — he was targeting China, too

• President Donald Trump has announced a trade deal with Vietnam.

• He lowered tariffs on Vietnam to 20% but is slapping 40% tariffs on transshipments through the country.

• Vietnam has benefited from supply-chain shifts due to US-China trade tensions.

President Donald Trump just gave Vietnam a trade break — and used it to squeeze China.

On Wednesday, Trump announced a trade deal with Hanoi that would levy 20% on imports from Vietnam, down from the 46% rate Trump announced on "Liberation Day." In return, Vietnam has agreed to allow American goods to enter the country duty-free.

What's also significant is that Trump announced a 40% tariff on goods shipped from another country via Vietnam to the US — a move that analysts say is aimed squarely at transshipments from China.

"The 'China quotient' in US negotiations with other Asian economies is arguably evident in the deal with Vietnam," wrote Vishnu Varathan, Mizuho's macro research head for Asia, excluding Japan, in a Thursday note.

"The US's intent is quite obviously to not disincentivize Vietnam's role as a substitute for China at a lower 20% tariff," he added.

Vietnam has benefited from global supply-chain shifts away from China since Trump's initial trade war during his first term. In response to those tariffs, many multinational companies, including Chinese firms, moved manufacturing operations to lower-cost hubs like Vietnam to sidestep US duties.

Last year, the US ran a $123.5 billion trade deficit with Vietnam, making it America's third-largest trade gap after China and Mexico, according to the US Trade Representative's office.

A model for future trade deals?

The move follows a temporary truce between Washington and Beijing in May, when both sides agreed to a 90-day pause in their tariff war. The US slashed duties on Chinese goods from 145% to 30%, while China lowered its tariffs on American imports from 125% to 10%.

Still, the transshipment tariff on Vietnam underscores the Trump administration's effort to close the backdoor for Chinese exporters seeking loopholes into the US market.

"A tariff framework that targets transshipment while preserving the potential benefits of efficient cross-border commerce is a smart move— and a model for future trade deals — if enforced transparently and paired with clear rules of origin," wrote Eli Clemens, a policy analyst at Washington-based Information Technology and Innovation Foundation, a nonpartisan research institute, on Wednesday.

The move also shows that Washington can stop Chinese supply chains from extending themselves into Southeast Asia.

"Future trade negotiations should also include targeted transshipment deterrents that level the playing field for US manufacturers and retailers," Clemens wrote.

Asia in a bind

Washington's focus on transshipment enforcement puts pressure on other Asian economies, which may find themselves forced to choose sides.

"It would be remiss to ignore this critical pillar of US trade deals with the rest of Asia, which is trained on undermining China's economic reach and influence," wrote Varathan.

The deal may also reinforce Beijing's view that US trade negotiations lacks "good faith." It could prompt retaliation — not just against the US, but also against Asian economies seen as siding with Washington.

"Other Asian economies will be particularly vulnerable to a two-sided geoeconomic squeeze given that their reliance on both China and US are significant," Varathan added.

Despite reservations about the deal, it still excited investors.

The S&P 500 and the Nasdaq Composite soared to record highs on Wednesday, and US stock futures are extending gains early on Thursday.

Vietnam's widely followed VN-Index also rose to its highest level since April 2022.

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Trump touts a Vietnam trade deal victory—but details on transshipment and import pledges remain unclear

With less than a week to go before the U.S.-imposed July 9 deadline for new trade deals, U.S. President Donald Trump unveiled a new trade deal with Vietnam, a country that has rapidly become one of the largest exporters to the U.S.

On Wednesday, Trump announced on Truth Social, his social media platform, that the U.S. will impose a 20% tariff on Vietnamese exports to the U.S. Goods deemed to have been transshipped through Vietnam will get a 40% levy.

In return, Trump claimed Vietnam will drop all tariffs on U.S. goods and “open their market to the United States,” pointing to U.S.-made SUVs as a “wonderful addition” to Vietnam’s roads.

Vietnam’s benchmark VN-Index climbed by 0.5%, as of 1 a.m. Eastern Time. Shares of U.S. companies with a major manufacturing presence in Vietnam rose: hotlink]Nike[/hotlink] rose 4%, while Apple jumped by 2.2%.

Vietnamese state media reported that To Lam, general secretary of the Communist Party of Vietnam and the country’s leader, spoke with Trump on Wednesday to discuss the tariff negotiations. According to the report, the U.S. will “significantly reduce reciprocal tariffs on many Vietnamese imports”; it noted as well that Trump “highly valued” Vietnam’s pledge to grant preferential market access to U.S. goods, including large-engine vehicles. To Lam also reportedly urged Washington to lift export restrictions on certain high-tech goods.

The deal makes Vietnam one of the few governments that have reached an accord with Washington since April 2, or “Liberation Day.” Trump struck a deal with the U.K. in early May, and reached a trade truce with Beijing last week.

Still, details of the U.S.-Vietnam trade agreement are murky. “The interpretation of transshipment is unclear,” DBS Bank wrote in a research note.

Transshipment refers to a practice where goods are moved from one vessel to another before being shipped off to their final destination. Yet the Trump administration also accuses Vietnam of being a backdoor for Chinese goods to evade U.S. tariffs.

Illegal transshipment typically involves changing the certificate of origin to a new country, without adding significant value.

Vietnam has turned into a key manufacturing hub for global supply chains. Apple, Nintendo, and other electronics manufacturers moved final assembly of their products to Vietnam, both to avoid U.S. tariffs on China and to diversify their supply chains.

These components often come from Chinese suppliers, but Vietnam-based manufacturers are also adding value through final assembly, before the goods are shipped to the U.S.

“I suspect the terms are still being developed. This is likely to be more of a framework,” says Deborah Elms, head of trade policy at the Hinrich Foundation.

The details of the agreement can also shift between Trump’s announcement and when the deal is formalized through an executive order. That process could take weeks: The U.S. and U.K. announced their deal in early May, but it wasn’t formalized until mid-June.

“The details will be extremely important,” Elms cautions. “Depending on the product and the manufacturing process, the rate could be lower or much higher, up to 40%. The uncertainty is set to continue for some time.”

A significant increase in purchases of American SUVs might also be a tall order for Vietnamese consumers. The average monthly income of a Vietnamese worker is about $320, significantly less than that of an average American worker.

Vietnam’s biggest purchases from the U.S. were computers, electronic products, machinery, and instruments, according to Vietnam government data. The country likely imported these goods to support its electronics manufacturing.

A 20% tariff is less severe than the 46% rate first proposed in early April. Yet it still signifies a ramp-up in trade frictions between the U.S. and Vietnam. It’s also double the baseline 10% tariff rate imposed on all imports.

Vietnam is highly exposed to the U.S., with 30% of its exports headed there, according to DBS.

DBS predicts a possible short-term rally in Vietnam’s stock markets ahead of the release of second-quarter GDP, which the country’s deputy prime minister suggests will be a strong 7.6% year over year. “However, brace for signs of an economic slowdown should export front-loading dissipate,” the bank warns.

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Vietnam’s trade deal with the US is a wake-up call for Asian governments grappling with the reality that higher tariffs are here to stay.

US President Donald Trump announced a 20% tariff on imports from Vietnam, and a 40% rate for goods transshipped through the country — a move mostly targeted at curbing Vietnam’s trade with China. In return, Vietnam is slashing import taxes on US goods to zero.

Although the US duties are lower than the 46% the US president had threatened to impose on Vietnam, the concessions made by the Southeast Asian nation and the higher rate for goods re-routed through the country have raised concerns in Asian capitals.

Officials in New Delhi, who are racing to clinch their own deal before a July 9 deadline when higher US tariffs kick in, say they view the Vietnam deal with a fair bit of caution. India had been seeking an exemption on reciprocal tariffs in its negotiations with the Trump administration, and Vietnam settling for a 20% rate was a worry, one of the officials said, asking not to be identified because the discussions are private.

India had also been pushing back against US demands to impose a higher tariff on goods with a larger proportion of foreign components, another official said.

The Vietnam deal suggests the US will play hardball in its negotiations with trading partners like India. New Delhi is seeking clarity on what kind of goods would carry higher levies based on foreign content, although it doesn’t expect to be hit with a rate as high as Vietnam, officials said.

India’s Ministry of Commerce and Industry didn’t immediately respond to an email seeking comment.

Asian nations like Vietnam and India are heavily reliant on China for imports and count the US as their biggest export markets.

The Lowy Institute think tank estimated that 28% of Vietnamese exports to the US were made up of Chinese content in 2022, up from 9% in 2018. In India’s electronic component sector, China accounted for more than 60% of the industry’s imports in 2024, according to an industry report.

In the negotiations, the US had been pushing Vietnam to get tougher on trade fraud and do more to prevent Chinese goods from being rerouted and repackaged through the country. Trump officials have also demanded India tighten rules-of-origin requirements in order to restrict Chinese goods being shipped to the US via India.

In Thailand, the Vietnam agreement was viewed as a sign of things to come. The tiered tariff system “isn’t just about taxes,” said Santitarn Sathirathai, an economist and member of the central bank’s Monetary Policy Committee. “It reflects that the new world of trade may reward countries that can actually create value domestically,” he said.

That means countries like Thailand — which is also under the spotlight as a transshipment hub for Chinese goods — will need to invest more and expand production bases.

“The Vietnam-US deal is not the end, but the beginning of a new approach to trade,” Santitarn said in a post on Facebook.

To ease trade tensions with the US, several Asian countries have vowed to buy more American goods to curb their trade surpluses with the US. Indonesia announced Thursday it will sign trade and investment pacts worth $34 billion with the US as part of its effort to secure a tariff deal.

The US had no concerns about transshipment involving Indonesia and hadn’t broached the topic in trade discussions, unlike in Vietnam, Coordinating Economic Minister Airlangga Hartarto told reporters.

China’s Interests

Much is still unknown about the Vietnam deal, including which goods would be deemed transshipped and carry a higher tariff rate. It’s also unclear how China would respond to the US’s measures to curb its trade with Asian nations.

On Thursday in Beijing, a spokeswoman for China’s Ministry of Commerce indicated the country will firmly protect its interests.

“My feeling is the Chinese will retaliate,” Abhisit Vejjajiva, Thailand’s former prime minister from 2008 to 2011, said in an interview.

“The Chinese might say to Vietnam that, ‘well, unless you’re offering us the same deal with the US, we’ll also charge you more tariffs,’” he said. “I think China will need to do that because otherwise it cannot deter the other countries from doing this kind of deal with the US.”

Singapore’s Deputy Prime Minister Gan Kim Yong said Southeast Asian nations will need to accept that higher US tariffs are here to stay and that businesses should expect greater scrutiny of their supply chains going forward.

‘No Choice’

“To benefit from lower tariffs – especially in sectors such as steel, autos and in time to come, pharmaceuticals – companies must be prepared to meet the US’ conditions over their production and supply chains, even if these requirements come at a much higher cost,” he said.

Kok Ping Soon, chief executive officer of the Singapore Business Federation, said firms will need to adjust to higher costs.

“If the US is going to impose a set of conditions that you have to fulfill in order to sell to the US, then you’re almost asking companies who operate a plant to bifurcate the plant,” he said in an interview on the sidelines of the Asean Conference 2025 in Singapore. “It just adds cost. But if your destination market is the US, you may have no choice but to do that.”

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Trump got another trade deal. This one could cost you.....

Any news that concerns Trump CNN will be first to bend it and force it to Americans to believe Trump is "Evil" ...Sorry l don't buy CNN and BBC because their intentions are same.

Shoes, electronics and clothing are just some of the goods that could get more expensive under the trade agreement President Donald Trump announced with Vietnam on Wednesday.

Wait — how’s that possible?

For the past three months, goods shipped from Vietnam to the United States were tariffed at a minimum 10% rate, a reprieve from the 46% rate that briefly went into effect in April before Trump announced a pause.

Trump claimed the delay would give countries more time to negotiate trade deals with the US. As his self-imposed July 9 deadline for deals approaches with few new agreements in place, Trump has threatened to raise tariffs again.

But here’s the kicker: Sealing a deal, or a framework for one, doesn’t prevent higher import taxes, either.

The agreement Trump announced via social media calls for a minimum 20% tariff on Vietnamese goods exported to the US. That’s double the rate US businesses are currently paying. In return, Trump said that Vietnam agreed to open its economy to trade with the US, including not tariffing American goods.

Many details remain unknown, including whether anything has been finalized. Vietnam’s state-run news outlet, Việt Nam News, referred to the agreement on Wednesday as “a framework.”

“Obviously this is not good news for American consumers,” said Clark Packard, a trade policy research fellow at the libertarian-leaning Cato Institute. Vietnam is the sixth-top source of foreign goods shipped to the US, a ranking that’s steadily risen over the past few years as shipments from China to the US have declined. Among the top goods the US buys from Vietnam are electronics, apparel, footwear and furniture, according to US Commerce Department data.

That makes it all the more likely Americans will be impacted by the higher tariff rates. “Certainly American consumers will ultimately bear the burden here,” Packard told CNN.

Tariffs are taxes on imported goods, making them more expensive to buy. Businesses foot the initial tariff bill for imported goods, but they often pass on some of those costs to consumers by raising prices.

But many businesses will absorb some or all of those tariff costs to avoid losing customers. And businesses often stockpile inventory ahead of tariffs, delaying cost increases for themselves and for customers.

Eventually, though, they may run out of options to protect consumers from higher prices.

“The Administration has consistently maintained that the cost of tariffs will be borne by foreign exporters who rely on the American economy, the biggest and best consumer market in the world,” White House spokesman Kush Desai said in a statement to CNN. Desai said recent inflation readings, which have yet to show widespread price increases even as tariffs on virtually everything the US imports have increased since April, are proof of that.

Trump’s tariffs are intended to “level the playing field for American industries and workers,” Desai said. In other words, by raising the cost of foreign-made goods, Trump hopes to induce more businesses to produce goods domestically.

However, it can take several years for businesses to onshore manufacturing. In the meantime, they may be stuck importing products from places like Vietnam.

Caleb Petitt, a research associate at the Independent Institute, a libertarian-leaning think tank, disputed the idea that American businesses will benefit from the tariffs because many rely on components produced abroad, as well as billions of dollars worth of finished goods.

“These tariffs will not help American industry and will burden American consumers with higher costs and uncertainty about the market,” he said.

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What to Know About ‘Transshipping’ and U.S. Trade Deals

A container is offloaded from the Wanhai 175 cargo ship at the Tan Vu Terminal, operated by Vietnam Maritime Corp., at Haiphong Port in Haiphong, Vietnam, on Jan. 15, 2025. 

A U.S. and Vietnam trade deal has been reached that means Vietnam will avoid the most severe tariff rates—set to go back up next week—but there’s a catch that could anger Vietnam’s largest trading partner, China.

The deal, announced Wednesday, will mean Vietnamese exports to the U.S. are tariffed at a 20% rate—lower than the initial 46% “reciprocal” tariff announced in April, but double the 10% universal tariff. Goods that are deemed to be transshipped, however, will be tariffed at a 40% rate—a policy that seems aimed at China which has used the method to get around U.S. levies. Transshipping involves transferring cargo from one vessel to another while in transit to the destination country and is often done to disguise a product’s country-of-origin in order to illegally skirt import levies.

In return, Vietnam agreed to drop all tariffs on U.S. imports, President Donald Trump said.

“In other words, they will ‘OPEN THEIR MARKET TO THE UNITED STATES,’ meaning that, we will be able to sell our product into Vietnam at ZERO Tariff,” the President posted on Truth Social on Wednesday morning.

At the heart of Trump’s deal with Vietnam—and his talks with other major trading partners—has been an effort to counter what he sees as China’s unfair trade practices. Trump’s trade adviser Peter Navarro called Vietnam “essentially a colony of communist China” in an April interview on Fox News while describing how nontariff barriers, including Chinese transshipments, contribute to U.S. trade deficits. “Vietnam sells us $15 for every $1 that we sell them and about $5 of that is just Chinese product that comes into Vietnam, they slap a ‘Made in Vietnam’ label on it and they send it here to evade the tariffs,” he said.

The higher tier of tariffs on transshipments will impact goods that have components originating in one country, such as China, but are routed through Vietnam then exported to the U.S. China supplies much of the components and raw materials to Vietnam and other Asian countries that are then used to make finished goods, but it also ships some finished goods through Vietnam or mostly finished goods that go through a minimal final assembly in Vietnam with their county-of-origin misrepresented as Vietnam, which is considered illegal.

But restrictions on transshipments could tick off China, which is a larger trading partner for most Asian countries than the U.S.

Here’s what to know about what the deal means for Vietnam and China.

What does the deal mean for Vietnam?

Vietnam has been keen to be on Trump’s good side since he announced his “reciprocal” tariffs in April.

Vietnam was the sixth-largest importer to the U.S. last year, supplying almost $137 billion worth of goods and fuelling a $124 billion trade surplus with the U.S.—the third largest trade gap with the U.S. after China and Mexico. The country’s share of imports to the U.S. was bolstered during Trump’s first term, when trade tensions with China pushed firms to move production to Southeast Asia.

Vietnamese officials have been in talks with the Trump Administration for weeks and even signed deals to purchase more American goods ahead of Thursday’s trade agreement. The country has promised to buy more aircraft, liquefied natural gas, and agricultural products from the U.S. Vietnamese officials have also backed the Trump Organization’s plans for a $1.5 billion luxury resort and golf club development outside Hanoi. Vietnam’s agreement, according to Trump, to remove all levies on U.S. imports is indicative of the country’s push to maintain close trading ties with the U.S., even as Trump has retreated from the relationship in other areas, such as through the shuttering of USAID.

Trump boasted that the zero tariffs will drive sales of American SUVs in Vietnam, although an American-made car, even with no duties, may still be more expensive than cars produced elsewhere, and it’s not clear how much domestic demand there is for American cars.

Vietnam also pledged to crack down on fraud and illegal transshipments even before the deal was cut. Thailand, South Korea and Taiwan have also implemented or stepped up similar measures since April.

The U.S.-Vietnam deal, however, does not currently address industry-specific tariffs, including a 25% tariff on cars and auto parts and a 50% tariff on steel and aluminium, that are subject to pending Commerce Department investigations. It could also still dampen Vietnam’s economy: Bloomberg Economics estimates that Vietnam could lose a quarter of its exports to the U.S. in the medium term under the deal, affecting more than 2% of its annual economic output.

How does China use transshipments?

The higher tariff on transshipments indirectly targets Chinese exports. China has routed its goods through other countries, including Vietnam, to bypass U.S. import levies, a practice that became more frequent during the U.S.-China trade war in Trump’s first term.

Earlier this year, ahead of Trump’s tariffs in April, Chinese exports to Vietnam and Thailand rose sharply, which Brookings analysts suggest is unlikely to reflect a rise in domestic demand in those countries and is instead more likely to reflect transshipments to the U.S.

Chinese shipments to Southeast Asian rerouting hubs like Vietnam, Malaysia, Indonesia and Thailand, also surged shortly before trade talks between China and the U.S. in May even as direct exports from China to the U.S. fell—suggesting that China was able to continue its flow of goods to the U.S. through transshipments even as countries touted crackdowns.

It’s too soon to tell how effective the transshipment clause and other measures will be in cracking down on fraud. “While the exact criteria for defining transshipment remain unclear, it is evident that Vietnam’s role as a potential connector for Chinese exports to the U.S. will diminish,” Su Yue, Principal China Economist at the Economist Intelligence Unit, told the South China Morning Post.

But some experts say at least some businesses may be willing to take the gamble, especially if the benefit of manufacturing in China outweighs the risk of getting caught.

“The thing about trade is when there are huge arbitrage opportunities, people are going to find a way to take advantage of them, legally or illegally,” Caroline Freund, an expert on international trade at the University of California at San Diego, told the Washington Post in May. “It’s like a river. You can keep putting rocks in, but the water’s going to keep flowing down.”

Ash Monga, who runs China-based supply chain management company IMEX Sourcing Services, tells TIME that in the wake of Trump’s tariffs, he noticed a rise in Chinese companies offering “Delivered Duty Paid” fraud services to U.S. importers, which involves underpricing goods in order to pay a lower duty. Suppliers in China would set up shell companies that would act as the “importer of record,” creating the perception among U.S. importers of lower risk. (Monga cautions that U.S. customs can still go after the U.S. businesses purchasing the goods from China and it can carry severe penalties.)

“They are doing it because people are looking for solutions to lower the tariff,” Monga says. “Businesses were at risk of not surviving so they were desperate to find any solution” even if those solutions are fraudulent.

China sees move as attack on interests

“The looming question now is how China will respond,” Bloomberg Economics analyst Rana Sajedi wrote in a research note. “Beijing has made clear that it would respond to deals that came at the expense of Chinese interests and the decision to agree to a higher tariff on goods deemed to be ‘transshipped’ through Vietnam may fall in that category.”

China vowed that it will retaliate if its interests are hurt by the U.S.-Vietnam trade deal.