Vietnam Transshipped Goods Will Face 60% Tariff; Coffee, Spices to Be Duty-Free
The U.S. released an outline of an agreed-to deal with Vietnam, but said it will be finalized "in coming weeks."
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The joint statement underlined that Vietnam will "provide preferential market access for substantially all U.S. industrial and agricultural exports," and that the U.S. will maintain the current 20% reciprocal tariffs, but will identify products from the Sept. 5 Annex III that will face only most-favored nation duties.
In response to questions about the deal on Air Force One as the president and Cabinet members flew from Malaysia to Japan on Oct. 27, U.S. Trade Representative Jamieson Greer said: "There's a handful of things like coffee, etc., the type of stuff we don't make in the United States or grow ... basically we can't. So it makes sense, if people are going to do a deal with us, we'll give them a good deal."
Vietnam is not in the top five coffee exporters to the U.S.; Brazil, Colombia, Honduras, Mexico and Guatemala are the top suppliers. However, between tropical fruits and nuts, coffee, tea and spices, it did export more than $1.4 billion in agricultural products that will no longer owe 20% additional duties.
Greer explained that as part of the agreement, Vietnam has promised to cooperate on duty evasion, and if there are products that are identified, those will face 60% additional tariffs -- the 40% transshipment rate on top of the 20% rate.
The joint statement says that Vietnamese companies intend to purchase more than $2.9 billion in agricultural commodities and more than $8 billion in Boeing aircraft.