US-Vietnam Trade Deal Sparks Debate Over Future Global Tariffs

A recent trade agreement between the United States and Vietnam, announced just days before Washington’s reciprocal tariffs were set to fully reimpose, has drawn significant global attention. The deal stipulates a 20% duty on Vietnamese imports to the U.S., a substantial reduction from the 46% rate imposed in early April, while U.S. exports to Vietnam will face no tariffs. Additionally, Vietnam has reportedly agreed to a 40% duty on products originating from other countries but routed through Vietnam for final shipment to the U.S., a practice known as transshipping, often used by China to circumvent trade barriers.

This agreement marks one of the few instances where a nation has secured a trade deal with the White House as President Trump’s 90-day temporary reprieve on tariffs approaches its end. Experts are now scrutinizing what this development signifies for other nations’ trade relationships with the world’s largest economy. Sebastian Raedler, head of European equity strategy at BofA, told CNBC that the Vietnam deal suggests tariffs are likely to increase, rather than decrease, moving forward. Conversely, Mark Williams, chief Asia economist at Capital Economics, believes other countries might find it easier to negotiate lower tariff rates than Vietnam’s 20%, citing Vietnam’s unusually weak negotiating position due to its heavy reliance on U.S. trade.

The deal has raised concerns among economists and strategists at Citi regarding other emerging market economies. They suggest that if this agreement sets a precedent, EM Asia could face more challenges than gains, despite the removal of some uncertainty. The 20% tariff rate is higher than the anticipated 10% levy, and the 40% duty on transshipped goods indicates similar demands may be made on other countries. Citi’s analysis points to Thailand and Malaysia as potentially more exposed than other EM Asian peers, beyond Vietnam, especially concerning the punitive transshipment tariff. The deal could also impact other exporters, like Korea, that have established factories in Vietnam.

Despite these concerns, experts anticipate several more trade agreements in the coming days, with the U.S. seemingly open to ‘rough’ frameworks rather than full, comprehensive deals. India is being eyed as a potential next country for a deal, though its agriculture sector could present an obstacle. For Europe, the Vietnam-U.S. deal doesn’t necessarily signal similar outcomes. Unlike Vietnam, the EU’s negotiations with the U.S. have been less smooth, with public criticism from the U.S. Lavanya Venkateswaran, senior ASEAN economist at OCBC Bank, emphasized that Vietnam had a clear intent to negotiate. While Europe aims for tariff-free trade, analysts like Trinh Nguyen of Natixis CIB suggest some duties are likely, with the EU potentially agreeing to a 10% tariff and seeking wins on a sectoral basis, rather than retaliating with equal tariffs.

阅读中文版 (Read Chinese Version)

Disclaimer: This content is aggregated from public sources online. Please verify information independently. If you believe your rights have been infringed, contact us for removal.