Although Trump once boasted that American businesses have shifted some production from China to Vietnam, he also recently asserted that Vietnam is 'worse than China' and, to that end, he has imposed tariffs of nearly 460 percent(!) on steel products imported from Vietnam.
Although this is technically a tariff on Vietnamese steel products, it might more fair to say this is a backdoor tariff on other trading partners.
The U.S. Commerce Department imposed duties of more than 400% on steel imports from Vietnam, accusing some businesses of shipping products from the Southeast Asian nation to evade the levies in a further escalation of tension between the two trading partners.
In three preliminary circumvention rulings on Vietnamese steel, the Commerce Department said certain products produced in South Korea and Taiwan were shipped to Vietnam for minor processing before being exported to U.S. as corrosion-resistant steel products and cold-rolled steel. Customs officials have been ordered to collect cash deposits at rates as high as 456.23% on imports of the steel products produced in Vietnam using material from South Korea and Taiwan.
In short, Vietnamese businesses are using metal inputs from South Korea and Taiwan to produce a finished product and the Trump regime does not believe this process is elaborate enough to escape tariffs.
It makes a certain sort of sense, however this is an escalation of Trump's trade war that could easily be repeated anywhere that goods are produced using inputs from other nations Trump has imposed tariffs on. Because in the global economy, supply chains like this are commonplace.
I have no doubt that Trump imposed these tariffs just before the long holiday weekend because he wanted to back up his tough talk on Vietnam with action, even if neither the talk or the action are necessarily worth the long-term cost of widening his trade war.
Nasdaq has more information on what's actually happening here.
The Trump administration plans to impose duties of up to 456% on some steel imports from Vietnam, manufactured using some materials from South Korea and Taiwan. It is worth noting here that imports of corrosion-resistant steel products and cold-rolled steel from Vietnam to the United States have risen 332% and 916% ever since tariffs were levied on South Korean and Taiwanese products in December 2015 and February 2016, respectively.
It has also been observed that Taiwan's cold-rolled steel exports to Vietnam were 29,900 tons in 2016, 32,400 tons in 2017 and 33,500 tons in 2018 (per Bureau of Foreign Trade data).
Commenting on the situation, Robert Carnell , Asia-Pacific chief economist at ING Bank, said that it was not unusual for companies to use such strategies for evading higher duties.
If Trump hadn't imposed tariffs on South Korea and Taiwan to begin with, none of this would have happened.