An initial trade deal with Vietnam offers a glimpse of how President Trump is pushing countries to cut back on trade with China.
In his first term, President Trump forced companies to kick their dependence on China. Now he is pressing countries to squeeze China out of their supply chains.
A preliminary trade pact between Vietnam and the United States announced on Wednesday is the most significant step so far toward that goal. Although the details are sparse, Vietnamese exports to the United States will face a 20 percent tariff, less than a much higher rate that Mr. Trump had threatened.
But notably, the deal would put a 40 percent tariff on any export from Vietnam classified as a transshipment, or goods that originated in another country and were merely passed through Vietnam.
The penalty aims at China, which has used Vietnam and neighboring countries to circumvent American tariffs on its goods. And it could become a feature of U.S. trade deals with other Southeast Asian governments as they try to avert sky-high tariffs that take effect on Wednesday.
Mr. Trump’s trade negotiators are pushing Vietnam’s export oriented neighbors like Indonesia to reduce how much Chinese content is in their supply chains. They are asking the government of Thailand to screen incoming foreign investment, hoping to stop Chinese businesses from moving into the country. They are even pressuring some countries to consider export controls of technology like semiconductors.
“The Trump administration is saying, ‘We need to see strategic decoupling if you are going to be a trade partner with the U.S.,’” said Steve Okun, chief executive of APAC Advisors, a geopolitical consulting firm. “The question is, will countries agree to that?”
