When the United States raised its tariff walls in April 2025, the world did not retreat — it rerouted. Rather than triggering the collapse in global commerce that many feared, the measures prompted a quiet reorganization of trade flows, with the European Union deepening ties across Southeast Asia and goods finding new paths through Vietnam and Mexico. Global trade has not contracted but expanded, reaching record volumes, suggesting that commerce, like water, finds its level regardless of the barriers placed before it.
Global Trade Thrives as Southeast Asia Becomes Tariff Workaround Hub
The tariffs are still there, still real, still costly. But they are also increasingly porous.
Mark
So the tariffs didn't actually slow down global trade the way people thought they would?
Mimi
Not at all. Non-US trade grew by $2.6 trillion since 2024, while US trade only grew $473 billion. The EU signed new free-trade deals with Southeast Asia instead of retaliating.
Luke
But wait—are those EU deals actually new commerce, or just formalized agreements that were already happening? And how much of that $2.6 trillion is real growth versus just rerouting?
Mimi
Fair point. The EU-Southeast Asia goods trade was already at €276 billion in 2025, up 55 percent from 2016, so the deals are accelerating existing relationships. But the transshipment issue complicates the picture.
Mark
Transshipment—that's when goods from China get relabeled as Vietnamese and then shipped to America?
Mimi
Exactly. Chinese exports to Vietnam hit record highs at the same time Vietnamese exports to America surged. Same pattern with Mexico and China.
Luke
But the source says President Lam denies transshipment is happening. How confident are we that it actually is?
Mimi
The data is suggestive but not conclusive. Rules of origin are notoriously hard to enforce. The US and Vietnam committed to cooperating on export controls, but the actual mechanisms aren't spelled out.
Mark
So the tariffs are still in place, but they're leaking?
Mimi
Essentially. They're raising prices and creating inefficiencies, but they're not actually stopping trade. The global economy found workarounds.
Luke
The source calls this "scenario 1"—tariffs proving unenforceable. But is that really what's happening, or is it just that enforcement is slow and imperfect?
Mimi
That's the distinction that matters. They're not unenforceable in principle, but in practice, detecting and stopping transshipment is extraordinarily difficult.
Mark
And what about the Vietnam-US deal? Is that actually going to happen?
Mimi
It's reportedly very close. Vietnam would get near-zero tariffs on some exports, and the US would get preferential access for agricultural, pharmaceutical, and energy goods. But again, the transshipment question hangs over it.
Luke
One more thing—the source says US imports from Vietnam have more than doubled in two years. Is that because of the deal, or despite the tariffs?
Mimi
Despite. The deal hasn't been finalized yet. The doubling happened in the existing tariff environment, which suggests companies are already routing goods through Vietnam to avoid higher tariff rates.
O Pulso
- The April 2025 US tariff announcements sent shockwaves through global markets, but the anticipated contraction never materialized — instead, traders began hunting for gaps in the walls.
- The EU moved swiftly in the opposite direction, signing free-trade agreements with the Philippines, Vietnam, and Indonesia, pushing EU–Southeast Asia goods trade to €276 billion — a 55% surge since 2016.
- Non-US global trade has swelled by $2.6 trillion since 2024, dwarfing America's own $473 billion trade growth and signaling that the center of commercial gravity is quietly shifting.
- Vietnam and Mexico have emerged as the story's most contested characters — their exports to the US are booming, but so are their imports from China, raising hard questions about transshipment and the true origin of goods.
- Rules-of-origin enforcement remains the regime's weakest link: verifying where a product truly comes from is notoriously difficult, and the workarounds — legal and otherwise — are flourishing faster than any oversight mechanism can follow.
When the United States raised its tariff walls in April 2025, the world did not retreat — it rerouted. Rather than triggering the collapse in global commerce that many feared, the measures prompted a quiet reorganization of trade flows, with the European Union deepening ties across Southeast Asia and goods finding new paths through Vietnam and Mexico. Global trade has not contracted but expanded, reaching record volumes, suggesting that commerce, like water, finds its level regardless of the barriers placed before it.
When sweeping US tariff increases were announced in April 2025, the expected scenarios — legal challenges, retaliatory coalitions, market collapse — gave way to something messier and more revealing: the world's traders simply found the gaps in the walls.
The European Union responded not with matching protectionism but with a wave of free-trade agreements across Southeast Asia. Deals with the Philippines, Vietnam, and Indonesia were concluded within eighteen months, with Malaysia and Thailand negotiations reportedly near completion. EU goods trade with the region reached €276 billion in 2025, up 55 percent from 2016, covering not just goods but services and investment — channels that barely existed a decade ago.
Globally, non-US trade has grown by more than $2.6 trillion since 2024, dwarfing America's $473 billion increase. Total world trade has hit record highs. Vietnam and Mexico stand out as particular beneficiaries, their exports to the US surging even under elevated tariff rates. Vietnam is reportedly close to a deal that would reduce its tariff rate to near zero, with President To Lam pledging purchases of American aircraft, infrastructure, and nuclear power in exchange.
Yet the picture grows complicated. Chinese exports to both Vietnam and Mexico have simultaneously hit record highs — a pattern consistent with transshipment, the practice of routing goods through intermediate countries to sidestep tariffs. A Chinese product relabeled in Vietnam or assembled in Mexico from Chinese components can, under current rules-of-origin frameworks, enter the US market at far lower rates. President Lam has denied any such activity, but the data is difficult to explain otherwise.
Enforcing against these workarounds is a formidable challenge. Rules of origin are hard to verify and harder to police, and roughly 80 percent of Mexican imports now qualify for tariff exemptions under the US-Mexico-Canada Agreement. The tariff regime has not dismantled global trade — it has rerouted it, creating a more complex, adaptive, and increasingly porous web of commerce. The barriers are real, and their costs are real. But the world, it turns out, is a very creative trader.
When the United States announced sweeping tariff increases in April 2025, economists and traders braced for a contraction in global commerce. The conventional wisdom held three likely outcomes: the tariffs would be struck down as illegal, they would spark a flurry of bilateral dealmaking, or they would trigger coordinated retaliation that would crater stock markets. What actually happened was messier and more interesting than any of those scenarios. Instead of retreating behind walls, the world's traders found the gaps in them.
The European Union, rather than matching American protectionism with its own, has been signing free-trade agreements across Southeast Asia. In the past eighteen months, the EU concluded deals with the Philippines, Vietnam, and Indonesia, with negotiations reportedly nearing completion for Malaysia and Thailand. The cumulative effect is striking: EU goods trade with Southeast Asia reached €276 billion in 2025, a 55 percent increase from 2016. These agreements cover not just goods but services and investment, opening new channels for commerce that barely existed a decade ago. The direction of travel, at least for the EU, points toward freer trade, not less.
Meanwhile, global non-US trade has grown by more than $2.6 trillion since 2024, dwarfing the $473 billion increase in American trade volumes. Total world trade has reached record highs. The United States itself has not been left behind—American goods trade continues to climb despite the tariffs—but the growth is concentrated elsewhere. Vietnam and Mexico have emerged as particular beneficiaries, their exports to the US surging even as tariff rates remain elevated. Vietnam is reportedly close to a deal with the United States that would reduce tariffs on Vietnamese imports to zero percent, down from the current 20 percent, while opening Vietnamese markets to American agricultural goods, pharmaceuticals, and energy exports. President To Lam has pledged to purchase American aircraft, transportation infrastructure, and nuclear power as part of the negotiation. Even without a final agreement, US imports from Vietnam have more than doubled in two years.
But here is where the story becomes complicated. Chinese exports to Vietnam have hit record highs. So have Chinese exports to Mexico. This pattern suggests something that tariff architects hoped to prevent: transshipment, the practice of routing goods through intermediate countries to evade tariffs. A Chinese product destined for American markets might be shipped to Vietnam, given a Vietnamese label, and then re-exported to the United States as a Vietnamese good, thereby avoiding the higher tariff rates applied to Chinese imports. President Lam has denied that any such transshipment is occurring, but the data tells a different story. The surge in Chinese exports to Vietnam, paired with the surge in Vietnamese exports to America, is difficult to explain through legitimate trade patterns alone.
Enforcing tariffs against this kind of workaround is extraordinarily difficult. Rules of origin—the regulations that determine where a product actually comes from—are notoriously hard to verify and even harder to police. A product assembled in Mexico from Vietnamese components sourced from Chinese suppliers can technically satisfy the rules of origin under the US-Mexico-Canada Agreement, which exempts roughly 80 percent of Mexican imports from tariffs, up from 50 percent in 2024. Whatever assembly occurs in Mexico apparently passes official scrutiny. The United States and Vietnam have committed to cooperating on export controls and investment security, but the practical mechanisms for detecting and preventing transshipment remain unclear.
Mexico's imports from Asia have accelerated sharply, suggesting that goods are flowing through Mexico as a gateway to American markets in much the same way they flow through Vietnam. The tariff regime that was meant to protect American manufacturers has instead created a complex web of workarounds and alternative routes. Tariffs remain an economic drag—they raise prices, distort supply chains, and create inefficiencies—but the global economy has proven far more adaptive than many feared. Rather than contracting, trade has expanded. Rather than retreating into national silos, countries have negotiated new agreements and found creative ways to move goods across borders. The tariffs are still there, still real, still costly. But they are also increasingly porous.
Citações Notáveis
President To Lam pledged to buy more American aircraft, transportation infrastructure and nuclear power as part of trade negotiations— Vietnam's commitment in US trade talks
President Lam denies there is any transshipment of Chinese goods through Vietnam— Vietnam's position on tariff workarounds
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