On July 8, 2025, the administration of President Donald Trump officially announced new tariffs that will take effect from August 1, targeting 15 countries without trade agreements with the U.S. The announcement warned that any retaliatory tariffs on American goods could result in further tariff hikes.

In this new landscape, Vietnam is seen as holding a relative advantage in the Southeast Asian region. According to ACBS Securities, Vietnam’s tariff rate is currently set at 20%, significantly lower than previous rates of 46% and more favorable compared to regional peers like Thailand, Cambodia (36%), Indonesia (32%), and Laos and Myanmar (40%).

This offers Vietnamese exporters a competitive edge in sectors like textiles, furniture, electronics, and agriculture. However, this advantage comes with challenges. While Vietnam’s agriculture, forestry, and fishery sectors rely less on imports, major export sectors like electronics and textiles have high import dependence for raw materials. Furthermore, the dominance of foreign direct investment (FDI) in Vietnam’s export structure increases the risk of being scrutinized under U.S. transshipment rules.

Focus on Transshipment Rules

According to Mirae Asset Securities, U.S. origin rules are based on “substantial transformation” — meaning products must undergo fundamental changes in name, character, or use in the exporting country. Simple assembly, repackaging, or transiting through Vietnam does not qualify as Vietnamese origin.

A 2023 study by John M. Peterson highlights that the application of “substantial transformation” by U.S. Customs and Border Protection (CBP) has become increasingly inconsistent, creating uncertainty for exporters. This inconsistency poses risks even for Vietnamese firms that believe they comply with the criteria.

The U.S. considers goods as transshipped if they originate from another country and are only minimally processed in Vietnam before export. To mitigate the risk of being slapped with a 40% transshipment tariff, Vietnamese companies must meticulously document their production processes and supply chains.

Vietnam’s Countermeasures

Vietnam’s government is proactively addressing these risks. Under Directive 09/CT-BCT, authorities have intensified the inspection and supervision of product origins. The directive emphasizes stricter enforcement and verification of Certificates of Origin (C/O) compared to previous guidelines under Decree 31/2018/ND-CP.

Additionally, collaboration has been strengthened among the General Department of Customs, the Ministry of Industry and Trade, and the Vietnam Chamber of Commerce and Industry (VCCI) to tighten C/O issuance controls.

For manufacturers, the pressure is mounting to prove their products genuinely qualify as “Made in Vietnam” under the substantial transformation standard. The most direct approach is to increase local content ratios by sourcing more components and raw materials domestically or from multiple suppliers.

At the same time, these developments are creating momentum for Vietnam to vertically develop its domestic supply chains, though real progress is unlikely to be smooth or fast in the short term.

Source: VnEconomy