On July 28th, Bloomberg reported that U.S. customs officials conducted surprise inspections at several factories in Vietnam that are associated with China. This action further increased concerns that the U.S. government may soon find new excuses to expand the list of goods subject to additional tariffs on Vietnam.
An anonymous source informed that American inspectors focused on examining company documents, sources of raw materials, and production processes. They aimed to assess how much added value these products gained in Vietnam before being exported to the United States. At the same time, they investigated whether there were any issues related to intellectual property infringement in software.
However, people familiar with the matter said that there is currently no evidence from the United States indicating that Chinese goods have been illegally transferred to the United States through Vietnam.
The United States has been continuously pressuring Vietnam to address issues such as intellectual property protection, overcapacity, and trade fraud. Currently, the US and Vietnam have been negotiating the trade framework agreement for several months, attempting to finalize the final version. However, it is reported that the latest round of negotiations was tense and difficult to progress, with significant differences still remaining between the two sides on issues such as transit and other non-tariff barriers.
Last week, Vietnam, along with about 60 other economies, was announced by the United States to face new tariffs. The reason given by the US is that these countries failed to take sufficient measures to address the issue of so-called "forced labor" in their supply chains.
Vietnamese Ministry of Foreign Affairs responded on the 25th, saying that the US side "did not fully reflect Vietnam's efforts in preventing, reducing and eliminating forced labor", including a ban on importing goods produced under forced labor.
Additionally, Vietnam is one of the countries that the United States is investigating regarding the issue of 'overcapacity'. Currently, Vietnam is the only country facing three investigations under the US 'Section 301'.
Verisk Maplecroft's Laura Swartz, a senior analyst for Asian issues at the UK risk consulting firm, said that advancing from trade framework agreements to complete agreements is challenging due to the significant stakes involved. She noted that "as the investigation results progressively translate into actual tariff measures, pressure will continue to rise on both sides" regarding the agreement.
In recent years, Vietnam has become an important manufacturing base for many American companies. Some multinational corporations are promoting the diversification of their supply chains, transferring part of their production to Vietnam. This has led to a continuous increase in Vietnam's trade surplus with the United States. According to the latest data released by the United States for May, Vietnam's trade deficit with the United States became one of the largest sources of trade deficits for that month.
The Trump administration has long believed that large bilateral trade deficits indicate an “unfair” trade relationship, and that policy measures are needed to address this issue. This means that Vietnam is likely to face increasing pressure from U.S. tariffs.
Regarding the additional tariffs imposed by the United States on Vietnamese goods that may affect Chinese products passing through Vietnam, the Chinese Ministry of Foreign Affairs previously stated that China has always advocated for resolving economic and trade disputes through equal dialogue and negotiation among all parties. At the same time, relevant negotiations and agreements should not target or harm the interests of third parties.
