Vietnam risks from Donald Trump’s tariffs

Vietnam, which previously benefited from the U.S.-China trade war by attracting manufacturing investments, now faces potential economic challenges due to President-elect Donald Trump's proposed tariff policies. Trump's administration has indicated plans to impose tariffs ranging from 10% to 20% on imports from various countries, with even higher rates for Chinese goods. Given Vietnam's significant trade surplus with the U.S.—reaching $102 billion in the first ten months of 2024, a nearly 20% increase over the same period in 2023—the country could become a target for these protectionist measures.

Analysts warn that such tariffs could adversely affect Vietnam's economy, potentially reducing its GDP growth by up to 4 percentage points. This concern is heightened by the fact that a substantial portion of Vietnamese exports to the U.S. includes goods assembled from Chinese components, which might be perceived as attempts to circumvent direct tariffs on Chinese products.

In response to these potential challenges, Vietnamese officials are exploring strategies to mitigate the impact. One approach involves increasing imports from the U.S., such as liquefied natural gas (LNG) and military equipment, to help balance the trade surplus. Additionally, there is an emphasis on enhancing the traceability of goods and components to ensure compliance with international trade regulations and to dispel concerns about being used merely as an assembly site for products made in China.

Despite these potential hurdles, Vietnam continues to attract foreign direct investment (FDI). The country's strategic location, competitive labor costs, and improved infrastructure make it an appealing destination for companies seeking to diversify their manufacturing bases. However, the prospect of new U.S. tariffs has led some businesses to reconsider or delay their investment plans in Vietnam, underscoring the need for the country to navigate these uncertainties carefully.

In summary, while Vietnam has previously benefited from shifts in global trade dynamics, the proposed tariff policies under President-elect Donald Trump's administration present new risks.

1 - Vietnam's soaring US trade surplus stokes new fears of Trump tariffs

By Francesco Guarascio. Reuters. December 5, 2024.

Vietnam's soaring US trade surplus stokes new fears of Trump tariffs

• Vietnam's surplus with Washington up nearly 20% from 2023

• Trump's trade adviser pick has supported tariffs on Vietnam

• Vietnam has fourth-largest surplus among all US trade partners

• Communist-run nation is home to export operations of several US multinationals

Vietnam is vulnerable to becoming the new Trump administration's next target for tariffs as data shows its trade surplus with the United States ballooning, industry executives and analysts said.

The Communist-run country, home to large industrial operations of U.S. multinationals such as Apple, Google, Nike and Intel, has the fourth highest commercial surplus with the United States, topped only by China, the European Union and Mexico.

U.S. trade data released on Thursday showed the country's deficit with Vietnam reached $102 billion in the first ten months of this year, nearly a 20% increase over the same period in 2023.

"For Trump the main metric is the trade deficit, and the Vietnam number is bad," said Deborah Elms, head of trade policy at the Asia-based Hinrich Foundation.

"Vietnam is an ideal candidate for early action because it cannot easily retaliate," she said.

President-elect Donald Trump, who takes office in January, threatened tariffs of up to 20% on all U.S. imports during his election campaign.

His son Eric, a top adviser, has cited Vietnam among countries that "ripped off" the U.S., according to a video shown last week at a business conference in Hanoi organised by American chambers of commerce.

At the event several businessmen and trade association representatives expressed concern about possible

Episode 3599 - December 22 - Tiếng Anh - Rủi ro của Việt Nam từ thuế quan của Trump - Vina Technology at AI time

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Episode 3599 - December 22 - Tiếng Anh - Rủi ro của Việt Nam từ thuế quan của Trump - Vina Technology at AI time