Signal U.S.-ASEAN Trade & Tariff Developments

Summary

US trade policy has moved beyond simple tariffs toward a supply chain enforcement model covering rules-of-origin verification, transhipment and forced labour regulation. Compliance now requires visibility several tiers deep. Reporting found enforcement has been inconsistent in practice: veteran trade negotiator Wendy Cutler noted that defining and enforcing transhipment proved too complicated given Washington's ambitious timeline, so agreements instead include placeholders for future rules-of-origin discussions, such as Article 4.1 of the US-Indonesia agreement. Under Trump's executive order, goods CBP determines were transhipped to evade duties face a 40% penalty tariff with no reduction option, and Commerce Secretary Lutnick said the levy could apply to goods with more than 30% third-country content. For Vietnam specifically, qualifying for a 20% rate instead of 40% requires proving exports are not transhipped. A Harvard study found only 9% of Vietnamese export growth to the US from 2018-21 was attributable to transhipment, and combined Section 301 and 232 measures now cover over $350 billion of imports including Vietnam, Malaysia, Thailand and Mexico.