As per the new trade pact announced by President Donald Trump, the US will impose a flat 20% tariff, besides a 40% tariff on transshipped goods from Vietnam.
Beyond a deviation from the previous commitments under the 2000 US-Vietnam Bilateral Trade Agreement (BTA), where Vietnamese goods were subject to 2-10% tariffs, the new deal seeks to tax transshipped goods, which differs from the rules of origin on which tariffs or duty concessions are based.
“The terms are that Vietnam will pay the United States a 20% tariff on any and all goods sent into our territory, and a 40% tariff on any transshipping,” Trump said in a post on X.
“India needs to be cautious as these transshipment tariffs could be a different form of ‘rules of origin’, which could have a detrimental impact on our pharmaceutical and electronics exports where the import component is high,” said trade expert Biswajit Dhar.
Indian trade negotiators are in the US since last week to thrash out a deal before the July 9 deadline for an interim deal to avoid US reciprocal tariffs, but India has hardened its stance to protect its sensitivities.
