US-Vietnam Trade Deal Risks Irking China

Trade Agreement & Tariffs - US and Vietnam reached a trade deal, avoiding higher tariffs on Vietnamese exports to the US [1] - A 20% tariff will be imposed on Vietnamese exports to the US [1] - A 40% levy will be placed on goods deemed to be trans-shipped (goods with components from other countries routed through Vietnam) [1] - The new US levy on Vietnam is lower than the initially announced 46% but double the 10% universal base rate [2] Potential Risks & China's Role - Risks are still tilted to the downside for Vietnam, according to Bloomberg Economics analysis [2] - China might retaliate despite its trade truths with the US, potentially impacting Vietnam's economy [3] - China's retaliatory moves could have an outsized impact on Vietnam's economy, given its position as Vietnam's largest trading partner and a key source of inputs for domestic production [3] - US efforts to forge deals could isolate Chinese firms from global supply chains, causing increasing wariness from China [3]