Trump Targets Vietnam in Bid to Isolate China from Global Supply Chains

During his first term, President Donald Trump pushed companies to reduce their dependency on Chinese manufacturing. He is now intensifying efforts by encouraging other nations to exclude China from their supply chains.

A recently announced preliminary trade deal between the United States and Vietnam marks the most concrete step toward this goal. Although specifics remain limited, the agreement sets a 20 percent tariff on Vietnamese exports to the U.S., a rate lower than the much higher tariffs Trump had previously threatened.

Crucially, the pact imposes a 40 percent tariff on any Vietnamese exports identified as transshipments—goods originating from a third country but routed through Vietnam.

This measure clearly targets China, which has used Vietnam and neighboring countries to sidestep U.S. tariffs on its merchandise. Similar provisions could feature in future U.S. trade agreements with other Southeast Asian governments aiming to avoid the steep tariffs set to take effect.

Trade negotiators under the Trump administration are also pressuring Vietnam’s export-driven neighbors, such as Indonesia, to reduce the share of Chinese components in their supply chains. They are urging Thailand to tighten controls on incoming foreign investments to prevent Chinese companies from establishing a foothold there. Additionally, some countries face pressure to consider export controls on advanced technologies, including semiconductors.