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Vietnam Tightens Domestic Goods Regulations to Appease US Tariff Concerns

Amid the ongoing US-China trade war, officials in Vietnam are working to strengthen manufacturing regulations in an effort to avoid tariffs from President Donald Trump.

According to Nikkei Asian Review, the move comes amid concerns that Chinese manufacturers are routing products destined for the US through Vietnam in order to skirt export tariffs put in place over the last year.

Under the new regulations, in order to be designated "Made in Vietnam," materials imported into the country from China need to be processed into a distinct product, with domestic work adding value worth at least 30% of the final price.

The news source shares that the government is currently seeking input on the rules from manufacturers and consumers, and aims to release final, complete regulations soon.

In July, the US Commerce Department imposed massive tariffs on South Korean and Taiwanese steel shipped to the US through Vietnam with minimal processing.

Such a process is known as trans-shipment, and Vietnamese officials have been working to crack down on this practice since early June.

Nikkei adds that exports from Vietnam to the US have surged as manufacturers shift production from China to the Southeast Asian nation, leading to a yawning trade value gap between the two countries.

In May, the US Treasury Department added Vietnam to a list of trading partners which "merit close attention to their currency practices and macroeconomic policies," while in June, President Trump said in an interview on trade that Vietnam is the "single worst abuser of everybody," sending alarm bells ringing in Hanoi.

[Photo via Flickr user ILO Asia-Pacific]

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