China’s Influence Challenges U.S.-Vietnam Trade Negotiations

In southern Vietnam near Ho Chi Minh City, Chinese logistics operations are running at full speed inside sprawling metal warehouses. Numerous workers are busy packaging cosmetics, apparel, and footwear for Shein, a Chinese fast-fashion giant, while recruiters conduct interviews to fill hundreds of additional positions.

Nearby, at an industrial complex managed by Alibaba’s supply chain division, a continuous flow of trucks transports goods, underscoring the robust Chinese business presence.

Chinese investment and infrastructure have contributed to job creation in Vietnam, bolstering its reputation as an attractive alternative manufacturing hub for global companies seeking to diversify beyond China.

However, as the U.S.-China trade conflict disrupts supply networks, China’s pervasive involvement has become Vietnam’s primary challenge in avoiding a hefty 46 percent tariff.

Vietnamese authorities are working swiftly to finalize an agreement before the expiration of a 90-day tariff suspension scheduled for early July. Officials recently held a second round of discussions with U.S. representatives in Washington and plan to continue negotiations next month.

The U.S. government is pressing Vietnam to intensify efforts against companies that reroute Chinese goods through Vietnam to circumvent tariffs, a practice known as transshipment.