Indonesia to sign $34 bn pact with US

KEEPING A CHECK

- CLAIRE JIAO, PHILIP J. HEIJMANS & KATIA DMITRIEVA

PRESIDENT DONALD TRUMP'S two-tiered trade deal with Vietnam aims squarely at practices China has long used to skirt US tariffs: The widespread legal shifting of production to Southeast Asian factories and the murkier and illegal "origin washing" of exports through their ports.

The agreement slaps a 20% tariff on Vietnamese exports to the US and a 40% levy on goods deemed to be transshipped through the country. With details still scarce, economists said much will hinge on the framework Washington establishes to determine what it sees as "Made in Vietnam" and what it sees as transshipments.

Complicating matters is the fact that Chinese businesses have rushed to set up shop across Southeast Asia since Trump launched his first trade war back in 2018. The lion's share of Vietnam's exports to the US are goods like Airpods, phones or other products assembled with Chinese components in a factory in Vietnam and then shipped to America. That's not illegal.