How China Stands in the Way of a U.S.-Vietnam Trade Deal

China’s giant logistics machine was humming inside rows of metal warehouses near Ho Chi Minh City in southern Vietnam this month. Hundreds of workers packed cosmetics, clothes and shoes for Shein, the Chinese fast-fashion retailer. Recruiters needing to fill hundreds more jobs were interviewing candidates outside.

At another industrial park, owned by the supply chain arm of Alibaba, the Chinese e-commerce giant, trucks drove in and out at a steady clip.

This kind of activity, powered by Chinese money, has brought jobs to Vietnam. It is one of the forces that have made Vietnam a thriving destination for companies around the world looking for alternatives to China’s factories.

But as President Trump’s trade war is turning supply chains upside down, China’s role is emerging as the biggest obstacle for Vietnam as it tries to avoid a 46 percent tariff.

Vietnamese officials are rushing to secure a deal before a 90-day pause on the new tariffs ends in early July. They met with administration officials in Washington this week for a second round of talks. The talks will resume next month, Vietnamese officials said.

The Trump administration wants Vietnam to do more to crack down on companies that are rerouting goods from China to Vietnam to avoid tariffs, a practice known as transshipment.