Southeast Asian officials spent the past few days praising President Trump’s tariffs as a win, saying that they could now compete fairly with their neighbors and that their businesses could plan for the future.
But though tariffs for Cambodia, Thailand and Vietnam are set at around 20 percent, those countries still face a cloud of uncertainty as negotiations grind on. The biggest concern: details surrounding the 40 percent tariff on so-called transshipments of products from China, and especially what percentage of Chinese-made components would set it off.
Although the countries have taken steps to crack down on the practice, they say the Trump administration has not defined clearly what it regards as a transshipped product.
This has implications for Southeast Asia because Chinese manufacturers have long set up factories in the region, and many of the goods made in them use components that are made in China. Exactly how the United States plans to determine whether a product from Thailand, for example, would qualify for a 19 percent tariff or a 40 percent levy is not clear.
Senior officials in Southeast Asia say the United States is setting its criteria for so-called rules of origin unilaterally to define what constitutes a locally made product, based on a calculation that involves raw materials, overhead productions and the cost of labor.
“We explained to them that, if they put a very high percentage, we will not qualify, because we don’t have our upstream industry yet, so we need to improve and diversify our supply chains,” said Sun Chanthol, Cambodia’s deputy prime minister and lead trade negotiator.
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The post Southeast Asia Looks for Clarity From U.S. on ‘Rules of Origin’ appeared first on New York Times.
