Editorial | Transshipment clause in US-Vietnam trade deal cause for concern
Given how intertwined Chinese products are in regional supply chains, an expansive US definition of transshipment could be highly disruptive
The most extreme form of transshipment refers to exporters evading tariffs by diverting goods through a third country. But what about foreign components that have gone into another country’s domestic production or assembling?
China – a top supplier of goods and products to Association of Southeast Asian Nations economies – has already warned against trade deals that could undermine its interests.
But what worries people most in the region is the clause about transshipment. US President Donald Trump also wrote in his social media post announcing the deal that such goods would face a much higher rate of 40 per cent.