For retailers, US-Vietnam trade deal leaves questions

A trade deal announced by the US and Vietnam creates new question marks for sportswear and clothing retailers like Nike and Adidas that source shoes and clothes from factories in the Southeast Asian country.

- Helen Reid

The US will impose a 20% tariff on many imports from Vietnam, while “transshipping” from third countries through Vietnam will face a 40% levy, President Donald Trump said on Wednesday.

Garment and shoe factories in Vietnam rely heavily on yarns, polyester fabrics, and trims like buttons and zippers imported from neighbouring China. It was not immediately clear whether such products assembled in Vietnam from Chinese inputs would be vulnerable to the transshipment tariff.

Typically, transshipment would designate a product mostly made in China, shipped to Vietnam and then relabelled and exported as made in Vietnam.

US customs already watches for that practice, but the Trump administration has hardened its stance on it, with US Treasury Secretary Scott Bessent saying that “a huge amount” of trade from Vietnam is transshipment from China, in a CNBC interview Thursday.

Many questions remain over the trade agreement, said Sheng Lu, professor of fashion and apparel studies at the University of Delaware.