The new US-Vietnam trade deal is prompting importers to reconsider Vietnam’s role as a key alternative to China, as fresh tariffs and potential transshipment penalties introduce major cost and compliance risks, Reuters has reported→view source.

“With this new change and with the potential for this transshipment tariff, I think it’s going to cause a lot of importers to really question, is Vietnam really a good other option?” the publication quotes Lila Landis, a customs compliance consultant, as saying.

Other perspectives in the article include:

Sheng Lu, professor of fashion and apparel studies at University of Delaware:
Warned that confusing legal transshipment with the legitimate use of foreign components under rules of origin will create greater uncertainty and risk further supply chain disruptions.
Joe Jurken, managing director at The ABC Group (supply chain firm):
Said there is “disappointment” with the 20 percent tariff on Vietnam, as it narrows the gap with China’s 55 percent rate. This might even tempt some brands to stick with China rather than switch to Vietnam, due to China’s excess manufacturing capacity and Vietnam’s limited factory availability.
Jim Kennemer, managing director at Cosmo Sourcing:
Argued that while the tariff is lower than initially feared (better than 25–30 percent), it still leaves uncertainty. However, he suggested it might encourage some retailers who were hesitating to proceed with Vietnam orders, as it offers more clarity. Also noted it is nearly impossible to achieve a completely “not-China” supply chain.

The deal underscores rising trade friction and highlights how efforts to diversify away from China face new barriers, making it harder for brands to secure reliable, cost-effective alternative manufacturing hubs.

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