Tariff Pressures, Vietnam Solutions

As global tariff tensions intensify between the U.S. and China, businesses are rethinking where and how they manufacture. Amid these shifts, Vietnam emerges as a strategic alternative — balancing cost, compliance, and access to Asia’s fastest-growing markets.

1. A New Tariff Era: What the Numbers Really Say

Since 2018, one word has defined the U.S.–China trade story — tariffs. What started as a short-term political move has now turned into a long-term trade wall, reshaping how goods are made and moved across borders.

According to the Peterson Institute for International Economics, as of May 2025:

• U.S. tariffs on Chinese goods: 51.1%

• China’s tariffs on U.S. goods: 32.6%

Before all this, both sides were only around 3% — so we’re now looking at one of the tightest trade environments in modern history.

And the impact?Companies are feeling the heat — profits shrinking, supply chains stretching, compliance getting messy.But while most see problems, smart investors see opportunity - and more of them are finding it right next door, in Vietnam.

Vietnam’s ports rise as global tariff pressures reshape trade and supply chains

2. Inside the Current U.S. Tariff Structure (as of Q4/2025)

2.1. September 2025 Update – Timber & Furniture Duties

On September 29, 2025, the U.S. administration introduced new tariffs:

• 10% on softwood timber

• 25% on wooden upholstered furniture and kitchen/bath cabinets Effective October 14, 2025 and rising by January 1, 2026 to:

• 30% (furniture) and 50% (cabinets & vanities) unless trade talks reach a resolution.

These duties stack on top of the 20% fentanyl tariffs and Section 301 duties already in place, signaling that the U.S. is unlikely to de-escalate anytime soon.

2.2. The “Liberation Day” Reciprocal Tariffs

In April 2025, both sides entered a rapid escalation cycle:

• April 2: U.S. imposed 34% tariffs

• April 8: Raised to 125% after Chinese retaliation

• May 14: A temporary 90-day truce reduced the rate to 10%, plus the ongoing 20% fentanyl tariff

• August 12: The truce extended another 90 days (until November 10, 2025)

Without a new accord, the U.S. could revert to 34% or higher duties — particularly if Beijing’s countermeasures persis

2.3. Section 301 – The Core of U.S. Tariff Policy

Originally implemented to penalize unfair Chinese trade practices and intellectual property violations, Section 301 tariffs cover roughly US$550 billion in imports.

Category	Rate	Example Goods
Industrial goods (Lists 1–3)	25%	Machinery, steel products, electronics
Consumer goods (List 4A)	7.5%	Textiles, household appliances
New 2024–2025 Additions	25–100%	EVs, solar panels, semiconductors, batteries, medical gloves

These high-impact items directly pressure China’s tech, clean energy, and advanced manufacturing exports — sectors once considered untouchable.

2.4. Section 232 – National Security Layer

The U.S. has leveraged national security justifications to extend protectionist measures:

• Steel & aluminum: 50%

• Autos & parts: 25%

• Copper & copper products: 50%

• Metal-based home appliances: 50%

For manufacturers dependent on raw materials or intermediate goods from China, these tariffs make U.S. sourcing significantly costlier.

2.5. The Fentanyl Tariffs – An Unusual Lever

Beginning February 2025, Washington introduced “fentanyl tariffs” — 10% on all Chinese goods, later doubled to 20% — aimed at compelling China to clamp down on precursor chemicals.Although politically framed as an anti-narcotics measure, the economic consequence is effectively another layer of import tax.

3. China’s Retaliatory Tariffs: Equal Force, Broader Scope

China’s counter-tariffs cover both symbolic and high-value sectors:

• 15–25% on U.S. steel and aluminum

• 2.5–25% on LNG, autos, soybeans, and electronics

• 74.9% anti-dumping duties on POM copolymers (used in auto and medical equipment)

• 10–15% fentanyl retaliation tariffs on crude, coal, and agriculture

• 10% reciprocal tariffs during the truce (until Nov 2025)

All previous tariff exemptions expired on February 28, 2025, underscoring a full-scale, long-term stance.

4. Legal and Strategic Takeaways on Tariffs

From a policy perspective, the U.S. tariffs have evolved beyond punitive tools — they now function as industrial strategy, national security safeguard, and supply chain restructuring mechanism.

For multinational businesses, three realities emerge:

1. China is no longer the low-risk manufacturing hub it once was.

2. Tariff volatility will continue through 2026–2028, regardless of political outcomes.

3. Southeast Asia — particularly Vietnam — offers the most stable relocation route.

   
   

5. Vietnam: The Rising Safe Harbor as Tariffs Reshape Global Trade

Vietnam’s ascent as an FDI destination is not accidental. It sits at the crossroads of global trade, offering:

• 15+ active FTAs, including CPTPP, EVFTA, and RCEP

• Competitive labor costs and logistics advantages

• Legal predictability for both local and foreign investors

• Strategic proximity to China, allowing smooth relocation and supply-chain continuity

Manufacturers, logistics operators, and service providers are now pivoting operations southward — reducing tariff exposure while maintaining regional efficiency.

Vinex transforms that relocation into a streamlined, legally secure reality

Here’s your step-by-step roadmap to incorporate in Vietnam — fast and compliant:

1.  Define Your Entity Type

   - Domestic company: for Vietnamese investors — lighter reporting, simpler compliance.

   - FDI company: for foreign capital — subject to investment rules, but open to wider industries.

2. Secure Your Business Address

   - Lease or certify non-residential premises.

   - Opt for co-working flexibility or virtual offices for budget-savvy starts.

3. Choose Your Structure

   - LLC (Limited Liability Company): ideal for lean operations.

   - JSC (Joint Stock Company): built for scalability and investor entry.

Timeline: 1–3 months to full launch.