Over the past five years, Vietnam has grown into a go-to manufacturing hub for companies trying to diversify away from China. However, a recent shift in U.S. trade policy may now force American importers to re-evaluate that strategy.
On July 2, 2025, the U.S. announced a new trade framework with Vietnam, imposing a 20% tariff on most exports from the country, and a steeper 40% penalty on any goods deemed to be transshipped from third countries (particularly China). This deal may not be as severe as the 46% tariff initially floated earlier in the year, but it still sends a strong signal: the U.S. is watching the origin of products being imported closely, and loopholes will no longer be tolerated.
In this post, we break down the key elements of the deal and how importers should respond.
Episode sections
Read some summaries of this episode here:
00:48 – Liberation Day Tariffs: The Trigger for Talks
Trump’s April 2025 “Liberation Day” tariff threats on Vietnam reached as high as 46%, pushing both governments toward urgent negotiations.
03:04 – What’s in the US–Vietnam Trade Deal
The deal includes a 20% tariff on most Vietnamese exports, 0% on U.S. exports to Vietnam, and a steep 40% duty on goods considered transshipped—those with significant Chinese content.
05:09 – Transshipment Under Fire
The U.S. is targeting companies using Vietnam to mask Chinese origin. Without “substantial transformation,” products will now face a 40% tariff.
08:09 – Enforcement Worries: Who Decides What’s ‘Made in Vietnam’?
The discussion turns to how Customs and Border Protection might assess origin. Documentation and proof of transformation will be essential to avoid penalties.
10:14 – Vietnam as the First Domino
This deal may be a template for other Southeast Asian nations. Cambodia, Malaysia, and even India could face similar pressure over transshipped goods.
… and more. Listen to the episode to cover the topic in full!
Conclusion
This new deal signals the end of a passive “move to Vietnam and avoid tariffs” strategy. From now on, regulators are asking harder questions, and importers need real answers.
The U.S.–Vietnam framework should serve as a warning to any business relying on unverified country-of-origin labels. It’s time for companies to go deeper, validate their supply chains, and build compliance into their sourcing strategy. Because the cost of getting it wrong just went up.
