President Donald Trump announced a trade deal with Vietnam Wednesday that would allow U.S. goods to enter the country duty-free.

By closing the loopholes, the Trump administration is signalling what any future deal with China might look like. The 40% tariff on transshipped goods suggests that even if tariffs on China are eventually reduced, they’re unlikely to fall significantly below that threshold.

The Trump administration’s new trade deal with Vietnam aims to shut down any “backdoor” routes that allow Chinese goods to circumvent tariffs and flood the U. S.