U. S. -Vietnam Trade Deal: A New Chapter in Global Trade Wars

In a surprising move, the U. S. and Vietnam struck a trade deal just before the U. S. was set to reinstate full tariffs. The agreement cuts the duty on Vietnamese imports to the U. S. from 46% to 20%. Vietnam, in return, agreed to impose a 40% tariff on goods that come from other countries but are shipped through Vietnam to the U. S. This practice, known as transshipping, has been used by China to bypass trade barriers. This deal makes Vietnam one of the few countries to secure a trade agreement with the U. S. under the current administration. The deal has left other nations wondering about their future trade relations with the U. S. Some experts believe this deal signals that tariffs will continue to rise. Others think it might make it easier for other countries to negotiate similar deals. The deal has raised concerns for other emerging markets in Asia. Economists worry that the 20% tariff rate is higher than expected. The additional 40% tariff on transshipped goods could also affect other countries. Some experts believe that Thailand and Malaysia might be more exposed to these changes. There could also be spillover effects for countries that have set up factories in Vietnam. More trade deals are expected in the coming days. The U. S. seems open to making rough frameworks rather than full deals. India is one of the countries that might strike a deal next. However, the agriculture sector could be a hurdle for India. Allowing U. S. market access could lead to domestic backlash. The deal might not mean the same for the European Union. The EU's relationship with the U. S. has not been smooth. The U. S. has been critical of the EU in the past few months. Vietnam's deal shows that the EU might not get what it wants, which is tariff-free trade. The EU could agree to a 10% tariff and focus on sectoral wins.