The Nimitz-class vessel’s port call came the same day that China’s first domestically produced aircraft carrier, the Shandong, sailed into Hong Kong. Beijing claims almost the entirety of the South China Sea, through which more than 60 percent of global maritime trade passes, despite an international ruling that its assertion has no merit.
“The US Navy, along with our allies and partners, is committed to a free and open Indo-Pacific,” the ship’s spokesman, Lieutenant-Commander Mark Langford, told AFP by email without offering further details about the visit.
“These operations demonstrate the commitment to stability in the region, a commitment we uphold throughout the year and regardless of current events,” Langford said, calling the Philippines a “long-standing and critical ally.”
Manila and Washington have deepened their cooperation since President Ferdinand Marcos took office in 2022 and began pushing back on Beijing’s South China Sea claims.
Bound by a 1951 mutual defense treaty, the two allies conduct frequent maritime exercises in the South China Sea. The Philippine and US coast guards conducted their first-ever joint military drills in the archipelago nation’s coastal waters in May.
The Shandong, which sailed off the northern Philippines in April, arrived in Hong Kong on Thursday after concluding combat drills in the western Pacific alongside fellow Chinese aircraft carrier, the Liaoning.
The US Department of Defense stated in a December report that China has the largest navy in the world, with a battle force comprising more than 370 ships and submarines.
US-Vietnam Deal Sows New China Standoff
Vietnam’s trade deal with the United States averts the most punishing of Donald Trump’s “reciprocal” levies but has provoked new friction between Washington and Beijing.
Vietnam has the third-largest trade surplus with the United States, after China and Mexico, and was targeted with one of the highest rates in the US president’s “Liberation Day” tariff blitz on April 2.
The deal announced Wednesday is the first full pact Trump has sealed with an Asian nation, and analysts say it may give a glimpse of the template Washington will use with other countries still scrambling for accords.
The 46 percent rate due to take effect next week has been averted, with Vietnam set to face a minimum 20 percent tariff in return for opening its market to US products, including cars. However, a 40 percent tariff will affect goods passing through the country to circumvent steeper trade barriers — a practice known as “transshipping.”
Washington has accused Hanoi of relabeling Chinese goods to skirt its tariffs, but raw materials from the world’s second-largest economy are the lifeblood of Vietnam’s manufacturing industries.
“From a global perspective, perhaps the most interesting point is that this deal again seems in large part to be about China,” said Capital Economics.
It said the terms on transshipment “will be seen as a provocation in Beijing, particularly if similar conditions are included in any other deals agreed over the coming days”.
Beijing’s foreign ministry spokeswoman, Mao Ning, said on Thursday, “Negotiations and agreements should not target or harm the interests of third parties.”
‘Wouldn’t Celebrate Just Yet’ –
Shares in clothing companies and sports equipment manufacturers, which have a large presence in Vietnam, rose on news of the deal in New York.
But they later declined sharply as details were released.
“This is a much better outcome than a flat 46 percent tariff, but I wouldn’t celebrate just yet,” said Hanoi-based Dan Martin, from Asian business advisory firm Dezan Shira & Associates.
“Everything now depends on how the US decides to interpret and enforce the idea of transshipment,” he added.
“If the US takes a broader view and starts questioning products that use foreign parts, even when value is genuinely added in Vietnam, it could end up affecting a lot of companies that are playing by the rules.”
A Vietnam foreign ministry spokesman told reporters on Thursday that negotiators were still “in detailed discussion to concretise agreements”.
But there are scant details about the transshipment arrangements in the deal, which Trump announced on his Truth Social platform.
“The announced deal gives Vietnam a level of certainty that most other US trading partners do not have,” said American Chamber of Commerce in Hanoi chief Adam Sitkoff.
However, he said, “assessing the pros and cons of the deal is difficult without seeing further details about what the tariffs actually mean.”
“The answers to these questions can be the difference between celebrating or crying.”
The Looming Question
Bloomberg Economics forecasts that Vietnam could lose a quarter of its exports to the United States in the medium term, potentially endangering more than 2 percent of its gross domestic product as a result of the agreement.
“The Vietnamese government will now find itself under pressure to ensure that country-of-origin rules are enforced,” explained Jack Sheehan, head of regional tax at Asian legal and tax firm DFDL.
But uncertainty over how transshipping will be “defined or enforced” is likely to have diplomatic repercussions, said Bloomberg Economics expert Rana Sajedi.
“The looming question now is how China will respond,” she said. “Beijing has made clear that it would respond to deals that came at the expense of Chinese interests.”
“The decision to agree to a higher tariff on goods deemed to be ‘transshipped’ through Vietnam may fall in that category,” added Sajedi.
“Any retaliatory steps could have an outsized impact on Vietnam’s economy.”
© Agence France-Presse
