Vietnam and the United States are said to be close to a trade framework that will see goods given a scaled range of tariffs depending on the percentage of foreign content, Bloomberg news reported on Wednesday.

Exports to the U.S. that contain the highest proportion of foreign components would be charged at the top end of the range, around 20 per cent or above, the report said citing people familiar with the matter.

Products that contain a lower percentage of foreign components would be set a slightly reduced rate, while those entirely from Vietnam would face the lowest rate — potentially the existing universal 10 per cent levy, the people said. The details continue to be discussed and could still change.

Reuters could not immediately confirm the report.

Vietnam has been engaged in weeks of intense diplomacy with the US, its largest export market, during which the US has pressured Hanoi to get tougher on trade fraud and do more to prevent Chinese goods being rerouted and repackaged through Vietnam to skirt higher tariffs.

Prime Minister Pham Minh Chinh said last week he expects to see “positive results” from the negotiations with the US sooner than the July 9 deadline, when the so-called reciprocal tariff rate of 46 per cent is due to come into effect. Chinh also said the nation needs to balance relations with the US and China, its two most important trading partners, underscoring the challenge facing the country’s leadership.

Vietnam is heavily reliant on China for the raw materials essential to maintain its manufacturing-driven growth. China accounted for approximately 38 per cent of Vietnam’s total imports last year, according to customs data. In the first five months of the year, imports from China reached $69.4 billion, making it the nation’s biggest source for items such computer and electrical components, machinery and fabrics.