Andy Mukherjee, Columnist

China’s Asian Supply Chains Aren’t a Sham

US transshipment tariffs on Vietnam and Indonesia hint at massive rerouting of Chinese output. The concern is exaggerated.

July 17, 2025 at 5:00 PM EDT

By Andy Mukherjee

Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. Previously, he worked for Reuters, the Straits Times and Bloomberg News.

Asian supply chains run deep.
Photographer: Linh Pham/Bloomberg

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In the two US trade deals with Southeast Asia so far, there has been an obvious, unacknowledged presence of a third party: China.

President Donald Trump announced a 20% tariff on Vietnam’s own exports, but 40% on any “transshipping” of production elsewhere. In the more recent agreement with Jakarta, he tightened the screws further: If there is any rerouting of output from a higher-tariff country, then the evaded duty will be added to the 19% rate for Indonesia.1