ANI
03 Jul 2025, 09:01 GMT+10
New Delhi [India], July 3 (ANI): A new trade agreement between the United States and Vietnam is raising concerns and offering key lessons for India, especially for Indian exporters who see Vietnam as both a competitor and a partner in regional value chains, according to a report by the Global Trade Research Initiative (GTRI).
The report highlighted that despite a historic trade agreement signed in 2000 that allowed Vietnamese goods to enter the US at concessional tariffs of 2 to 10 per cent, the new deal imposes a flat 20 per cent tariff on all Vietnamese exports to the U.S.
This move could affect Vietnam's export flow worth USD 135 billion and reverse two decades of trade liberalization.
GTRI stated 'For Indian exporters eyeing Vietnam as a competitor and partner in regional value chains, the deal presents both cautionary lessons and strategic implications'.
The new agreement, announced by US. President Donald Trump, provides duty-free access to US exports entering Vietnam.
However, it sharply increases tariffs on Vietnamese goods exported to the US, reducing the earlier proposed rate of 46 per cent but still doubling or tripling the rates allowed under the 2000 Bilateral Trade Agreement (BTA).
Vietnamese goods such as textiles, footwear, seafood, furniture, handicrafts, and agricultural products had benefited from low tariff access to the US market since 2001, helping Vietnam grow its exports from just USD 800 million to over USD 135 billion.
The report warned that the new flat 20 per cent tariff will erase this advantage and may weaken Vietnam's competitiveness in the American market.
Another concern raised in the report is the US decision to impose a 40 per cent tariff on goods routed through Vietnam but originally made in countries like China.
Experts say this move is legally questionable and inconsistent with World Trade Organisation (WTO) rules, as transhipment does not change the country of origin.
GTRI noted that the timing of this deal is critical for India, which is in the final stages of negotiating its own trade agreement with the US. Indian negotiators are advised to learn from Vietnam's experience, particularly the risks of reversing previous concessions, applying blanket tariffs, and unclear rules around the origin of goods.
The report concluded that Indian exporters and policymakers must watch closely as the US reshapes its trade policies in Asia to identify both opportunities and red flags. (ANI)
Get a daily dose of Asia Pacific Star news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Asia Pacific Star.
More InformationBEIJING, China: China's national soccer team may struggle to stir excitement, but its humanoid robots are drawing cheers — and not...
]LONDON, U.K.: A World Health Organization (WHO) expert group investigating the origins of the COVID-19 pandemic released its final...
FRANKFURT, Germany: Germany has become the latest country to challenge Chinese AI firm DeepSeek over its data practices, as pressure...
Nearly three months after a devastating earthquake struck Myanmar, the country remains trapped in a deepening crisis, compounded by...
New Delhi [India], July 3 (ANI): A new trade agreement between the United States and Vietnam is raising concerns and offering key lessons...
Washington, DC [US], July 2 (ANI): US President Donald Trump was yet again at his rhetoric against the Democratic mayoral nominee for...
NEW YORK, New York - U.S. stocks diverged on Wednesday for the second day in a row. The Standard and Poor's 500 hit a new all-time...
NEW YORK CITY, New York: The U.S. dollar continues to lose ground, weighed down by growing concerns over Washington's fiscal outlook...
KABUL, Afghanistan: Afghanistan, long associated with war and instability, is quietly trying to rebrand itself as a destination for...
SANTA CLARA, California: Executives at Nvidia have quietly been cashing in on the AI frenzy. According to a report by the Financial...
NEW YORK, New York - Global stock indices closed with divergent performances on Tuesday, as investors weighed corporate earnings, central...
TORONTO, Canada: Canadian Prime Minister Mark Carney announced late on June 29 that trade negotiations with the U.S. have recommenced...