With the dust far from having settled on this week¡¯s U.S.-Vietnam trade agreement, one thing is clear: companies operating in what¡¯s become one of the most vibrant Asian economies are on notice to move up the value chain.
A key element of the deal first unveiled by U.S. President Donald Trump is a differentiated tariff setting, with a 20% American surtax on Vietnamese-produced goods and a 40% levy on those transshipped from elsewhere through Vietnam. That¡¯s largely aimed at China, which produces many of the inputs companies operating in its southern neighbor use for assembling their products.
"It will be quite difficult for Vietnam,¡± Do Thi Thuy Huong, an executive board member of the country¡¯s main electronics association, said of the new tariff schedule. "But it is a motivation for the country¡¯s economy ¡ª especially for the manufacturing sector, to develop more in an actual and substantial manner¡± and boost localization, she said.
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