With the dust far from having settled on this week’s U.S.-Vietnam trade agreement, one thing is clear: companies operating in what’s become one of the most vibrant Asian economies are on notice to move up the value chain.
A key element of the deal first unveiled by U.S. President Donald Trump is a differentiated tariff setting, with a 20% American surtax on Vietnamese-produced goods and a 40% levy on those transshipped from elsewhere through Vietnam. That’s largely aimed at China, which produces many of the inputs companies operating in its southern neighbor use for assembling their products.
"It will be quite difficult for Vietnam,” Do Thi Thuy Huong, an executive board member of the country’s main electronics association, said of the new tariff schedule. "But it is a motivation for the country’s economy — especially for the manufacturing sector, to develop more in an actual and substantial manner” and boost localization, she said.
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