Mon, 14 Apr 2025
Facing Trump tariffs, Vietnam eyes crackdown on some China trade

Hanoi tightens trade oversight amid US tariff pressure

Robert Besser
14 Apr 2025, 15:20 GMT+10

HANOI, Vietnam: Vietnam is preparing a series of trade enforcement measures as it scrambles to shield itself from sweeping U.S. tariffs, offering to crack down on Chinese goods rerouted through its territory and tighten oversight on sensitive exports.

The moves, aimed at averting long-term damage to its export-driven economy, were detailed in a government document seen by Reuters and confirmed by a source familiar with the matter.

The offer came amid growing pressure from U.S. officials, including White House trade advisor Peter Navarro, over concerns that Chinese products were being shipped to the U.S. under misleading "Made in Vietnam" labels to avoid higher tariffs.

Vietnam had hoped to avoid steep duties by making concessions, but it was still hit with a 46% tariff under President Donald Trump's "Liberation Day" package. Following a meeting this week between a Vietnamese deputy prime minister and the U.S. Trade Representative, talks are now underway.

Export-dependent Vietnam is seeking to reduce the tariff to between 22% and 28%, according to three people familiar with negotiations. One said U.S. officials had already indicated this range was possible in a March meeting.

Vietnam's government announced the start of formal talks this week, saying it would crack down on "trade fraud," without elaborating.

The Government Office held an emergency meeting on April 3, just hours after Trump's tariff announcement. Trade and customs officials were instructed to prepare a plan to clamp down on transshipment abuse within two weeks, the source said.

Illicit transshipment refers to goods being routed through a third country to avoid higher tariffs without significant processing or value added.

"China uses Vietnam to transship to avoid the tariffs," Navarro said on April 6, without offering supporting evidence.

The issue is complicated by the reality that many Vietnamese exports contain Chinese components or are processed in Chinese-owned factories located in Vietnam. Official trade data show that Vietnam's imports from China often mirror export volumes to the U.S.

In some cases, goods reportedly remained in Vietnamese ports just long enough to receive local documentation before being shipped on.

Vietnam is also preparing stricter controls on exports of dual-use goods, such as semiconductors, to prevent unauthorized transfers to China. A draft decree reviewed by Reuters, dated April 4, lays out new approval procedures and reflects U.S. concerns about sensitive technologies being diverted.

The U.S. considers dominance in advanced chips and AI as a national security priority and has taken steps to block Chinese access.

Hanoi has signaled alignment on tech by approving, under favourable terms, Starlink's satellite service run by Elon Musk, a known Trump ally. Musk reposted an earlier Reuters article confirming Starlink's expansion plans in Vietnam.

Two sources said Vietnam will also host Chinese President Xi Jinping next week, during which its aviation regulator is expected to approve China's COMAC planes.

This would follow announcements from Vietnamese carriers this week, securing U.S. loans to buy Boeing aircraft.

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