WASHINGTON (CP) – The Trump administration is demanding Vietnam crack down on Chinese companies using the country as a backdoor to avoid USA tariffs, as negotiations continue to prevent a devastating 46 percent levy on Vietnamese goods before the July deadline.
Vietnamese officials met with Trump administration representatives in Washington this week for urgent trade talks, as the country scrambles to avoid massive tariffs that could cripple its economy. The negotiations focus on stopping “transshipment” – a practice where Chinese manufacturers route products through Vietnam to dodge USA trade restrictions. With a 90-day pause on new tariffs ending in early July, Vietnam faces enormous pressure to satisfy American demands or risk losing its status as a major USA trading partner.
The crackdown targets Chinese logistics operations that have flourished across Vietnam, including major facilities near Ho Chi Minh City where hundreds of workers pack goods for companies like Shein, the Chinese fast-fashion giant. Alibaba’s supply chain operations and other Chinese-funded warehouses have created thousands of Vietnamese jobs while helping Chinese companies maintain access to USA markets. However, this Chinese investment now threatens Vietnam’s trade relationship with America, as the Trump administration views these operations as circumventing tariffs designed to pressure China.
Vietnam’s dependence on Chinese supply chains complicates any potential agreement, with garment factories importing 60 percent of their fabrics from China and Chinese money driving much of the country’s industrial growth. The political challenge for Vietnamese leaders involves balancing economic ties with both superpowers while maintaining the manufacturing boom that has made Vietnam a key alternative to Chinese factories. White House officials indicated that talks will resume next month, though they emphasized that substantive action against Chinese transshipment operations remains essential for any deal to succeed.