The US-Vietnam trade deal might have more consequences than you think

A trade deal

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

The US and Vietnam signed a trade deal, one of the few the White House has secured before the President’s April tariffs kick in on July 9.

Duty-free vs. 20% tariff

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

The deal guarantees that US goods can enter Vietnam duty-free, but Vietnamese goods will be subject to a 20% tariff when entering the US.

Cutting it by half

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

According to the Wall Street Journal, the deal gave local companies a positive outlook because, despite being high, a 20% tariff is less than half of the 46% Trump announced in April.

Hurting the country

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

Still, the deal will hurt the local economy, and it is not a great outlook for the Southeast Asian region, experts told the newspaper. It can also impact other negotiations.

High dependency

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

Vietnam had very little leverage to negotiate with, CBS said. Its economy is highly dependent on exports to the US. The WSJ noted that about 30% of all its good ends up in America.

An alternative to China

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

According to the newspaper, the country had emerged as an alternative for low-cost production, given the rising tensions and trade wars between the US and China.

Closing a back door

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

Still, companies not only used Vietnam as an alternative production location, but also as a back door. The trade deal places a 40% tariff on goods that go through the country but are not produced there.

A pattern across deals

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

The WSJ stated that President Trump did not specify that the provision was intended to halt the flow of Chinese products to the US. Still, the White House has demonstrated this intention throughout negotiations.

Threatening a shaky truce

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

The US pulled a similar move with the UK trade deal, and China is not happy. The agreement with Vietnam could endanger an already shaky trade truce.

A window to the future

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

Not only that, but the deal could also provide a negative outlook for countries still negotiating with the US, and condition their approach in the coming weeks.

Unsuccessful negotiations

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

The White House has failed to deliver its promise of dozens of trade deals during the 90-day pause on tariffs. Negotiations proved more difficult than expected.

Doubling down on tariffs

A trade deal, Duty-free vs. 20% tariff, Cutting it by half, Hurting the country, High dependency, An alternative to China, Closing a back door, A pattern across deals, Threatening a shaky truce, A window to the future, Unsuccessful negotiations, Doubling down on tariffs

Now, as the rest of the world evaluates the new deal with Vietnam, they realize that negotiation will not necessarily mean lower tariffs. Which could prolong them.

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