From Bloomberg via the Japan Times, November 10:
The last time Donald Trump was U.S. president, Vietnam reaped big benefits from the trade war he started with China. This time around the outcome could be different.
Trump has threatened tariffs of as much as 60% on Chinese goods in his second presidency, and duties of up to 20% for all imports from other countries. While Vietnam waits to see what specific measures it faces, some economists warn it could be one of the hardest hit countries in Asia due to its ballooning trade surplus with the United States and Trump’s determination to bring home more manufacturing jobs.
"We may see more pressure to impose tariffs on Vietnamese products and tighter monitoring of Vietnamese shipments to the U.S.,'' said Le Dang Doanh, an economist and former government adviser in Hanoi. "We may also see American manufacturers stepping up with complaints about dumping of Vietnamese products,” he added.
Since Trump slapped higher tariffs on China in 2018, the Southeast Asian economy has forged ahead, attracting record foreign investment and emerging as a manufacturing powerhouse. Vietnam’s northern regions are now dotted with massive factories employing thousands of workers churning out electronics for Apple suppliers and other global brands, following Samsung Electronics and Intel, which arrived in the country earlier.
The country has boosted trade with the U.S. over the past decade and now makes up more than a quarter of Vietnam's total exports as of last year, OCBC said in a note last month. Tariffs would cut gross domestic growth by up to 4 percentage points, it adds, leveling activity with pandemic levels.
One of Vietnam’s biggest concerns will be what happens now with its push for the U.S. to classify it officially as a "market economy” that would boost its exporters, and whether the Comprehensive Strategic Partnership, announced with much fanfare when President Joe Biden visited Vietnam last year, will remain a top priority of the incoming Trump administration.
In a congratulatory message to Trump, Vietnam’s Communist Party chief To Lam, President Luong Cuong and Prime Minister Pham Minh Chinh said they see the U.S. as "its strategically important partner’’ and noted "strong support from President-elect Trump in his first and new terms,’’ according to a statement on the government’s website.
Vietnam is among the world’s most trade-dependent nations; exports account for about 85% of its economy and the U.S. is its largest market. Vietnam had a surplus of around $100 billion with the U.S. last year, the fourth-largest imbalance with the U.S. after China, Mexico and Canada, and one that just keeps growing. At some point this is likely to put Vietnam in Trump’s sights.
"Historically, Trump’s policies have emphasized reducing trade deficits, and in his previous term, he enacted measures that impacted Vietnam’s trade balance with the U.S., such as labeling Vietnam as a currency manipulator and launching investigations into its trade practices,” said Tyler Manh Dung Nguyen, chief market strategist at Ho Chi Minh City Securities....
....MUCH MORE
"Ho Chi Minh City Securities", capitalism with Vietnamese characteristics.
Tyler Nguyen - possibly ditto.
If interested see also last week's link to Harvard Business School's Working Knowledge article:
"Charting the US-China Trade War: What Does 'Made in Vietnam' Mean?"
