Trump Administration Imposes New Tariff Deal with Vietnam; Taiwanese Businesses in Vietnam Consider "Third Option" Amid Rising Costs

The Trump administration has introduced a new wave of tariff measures and reached a trade agreement with the Vietnamese government. Under this deal, goods exported from Vietnam to the United States will be subject to a 20% tariff, while transshipped goods—especially those attempting to evade tariffs by mislabeling the country of origin—will face a 40% tariff, targeting so-called “origin laundering.”

However, Taiwanese manufacturers producing cast iron cookware in Vietnam admit that with Trump's ever-changing policies, they are now considering a "third option"—setting up factories in Mexico or other low-tariff countries instead.

Lo Shih-Liang, President of the Taiwanese Business Association in Hanoi, told TVBS News that his company exports cast iron cookware to markets in Europe and the U.S., with 46% of sales going to the U.S. alone. Therefore, the new tariffs have a significant impact. He noted that the main raw material—pig iron—is currently unavailable in Vietnam in suitable grades, and must be imported from Brazil or other regions, increasing costs. Now, with an additional 20% tariff, negotiating how to split the cost with customers is inevitable.

Lo revealed that he will fly to the U.S. at the end of this month to meet with his top 16 clients to negotiate how the tariff burden will be shared. Ultimately, the end consumer will also have to shoulder part of the cost, making it a three-way absorption of the tariff impact.

Currently, Lo expects the costs to be split 50/50 with customers, because some product lines have profit margins of less than 10%, and adding tariffs could mean operating at a loss. Still, in the OEM cast iron cookware industry, once a factory is built and machines and facilities start depreciating, "you have to keep operating—even without profit."

Looking at other countries' tariff rates, Indonesia is at 32%, Thailand and Cambodia at 36%, and Bangladesh at 35%—rates that Lo described as “unworkable.”

Although his company still maintains some production capacity in China, Lo noted that China’s tariff outlook doesn’t seem much better, which is why he’s seriously evaluating the "third option": moving operations to Central or South American countries with lower tariffs, such as Mexico. He added that Mexico has existing warehousing facilities and is closer to pig iron sources, making it a possible location for future factory expansion—but for now, the company is taking it “one step at a time.”