Vietnam finds itself caught between its two biggest trading partners as the Trump administration tries to stop Chinese exporters using Vietnam as a way station.

On July 2, President Donald Trump finalized a new trade agreement with Vietnam, which he had personally negotiated with General Secretary Nguyen Xuan Phuc. The deal has a tariff of 20%, which will be assessed on all goods imported from Vietnam, and a 40% charge on any goods that might be considered transshipped goods.

A trade deal announced by the U.S. and Vietnam creates new question marks for sportswear and clothing retailers like Nike and Adidas that source shoes and clothes from factories in the Southeast Asian country,