Nguyen Huu Phuc was “very upset” when Donald Trump pulled the US out of the Trans-Pacific Partnership commerce settlement in 2017. However two years later Mr Phuc, who runs Como, a small textile advertising firm in Ho Chi Minh Metropolis, is in a buoyant temper.

His group’s garment-making division plans to double its employees to greater than 1,000 by the tip of this 12 months due to surging demand for its shirts, trousers, sleepwear and different merchandise.

He says he has Mr Trump to thank for it — the US-China commerce battle is benefiting Vietnam greater than every other nation in Asia as extra producers, patrons and traders shift their provide chains away from China.

“The commerce battle between Donald Trump and Xi Jinping’s two nations could make issues higher for Vietnam — and never solely Vietnam however Taiwan, Korea, Myanmar, Laos, Cambodia and Bangladesh, who’re additionally good at textiles,” Mr Phuc mentioned. “That’s the reason we’re investing quite a bit.” 

US imports from Vietnam surged by almost 40 per cent within the first 4 months of this 12 months in comparison with the identical interval final 12 months, in response to a Monetary Instances evaluation of information from america Worldwide Commerce Fee. This was the most important rise among the many 40 largest importers to the US.

Over the identical interval, US imports from China fell by 13 per cent, the second-largest contraction since 2009.

The shift is lifting gross sales at Vietnamese producers and suppliers not solely in textiles, however a variety of different sectors starting from seafood to semiconductors; sectors during which the US has levied tariffs on their Chinese language counterparts have made the largest beneficial properties.

Within the first 4 months of this 12 months, US imports of cellphones from Vietnam greater than doubled year-on-year, whereas imports from China contracted by 27 per cent, in response to knowledge from the USITC. Over the identical interval, US laptop imports from Vietnam rose by 79 per cent, in opposition to a 13 per cent drop in Chinese language imports.

“These days I see quite a lot of patrons from China and from the remainder of the world on the lookout for different sources from Vietnam and different nations like Cambodia,” mentioned Vu Ngoc Khiem, nation supervisor in Vietnam for World Sources, an organization that goals to hyperlink up world suppliers to patrons.

US and European retailers stepping up their shopping for in Vietnam embrace Dwelling Depot, Goal, Zara and OBI, Mr Khiem mentioned, and the vary of merchandise they’re shopping for embrace luggage, attire, footwear, metal and aluminium.

For Vietnamese corporations corresponding to Minh Phu Seafood, Vietnam’s largest shrimp producer, the “commerce battle between China and the US will create many probabilities for us to develop our enterprise,” mentioned Le Van Quang, its founder and chief government.

Whereas the corporate’s Chinese language rivals used to import uncooked product from Vietnam and India to course of it domestically and export it to the US, they’ve stopped doing so for the reason that Trump tariffs eroded their margins, he mentioned. US imports of fish from Vietnam rose by greater than 40 per cent within the first 4 months of this 12 months, in response to USITC knowledge, whereas imports from China fell.

Vietnam is benefiting particularly as a result of it sells most of the merchandise hit by the tariffs. 

“Vietnam is an outlier, and the explanation for that’s that it occurs to promote quite a lot of the identical items that will be topic to tariffs in China,” mentioned Yasuyuki Sawada, chief economist on the Asian Growth Financial institution. 

The ADB has estimated that Vietnam stands to achieve as much as a cumulative 2 per cent of GDP over three years if the US-China commerce dispute escalates additional.

The commerce battle has accelerated a longstanding pattern during which some corporations — Chinese language, US and others — arrange factories in Vietnam to flee rising wages, labour shortages and tighter environmental laws elsewhere. Overseas direct funding in Vietnam reached a document $18bn final 12 months, up almost 20 share factors to 58 per cent of GDP — topping most different south-east Asian nations.

“Extra abroad prospects are trying to find Vietnam — the demand is best,” mentioned Quach Kien Lan, director of Greenyarn, a Vietnamese material producer that’s experiencing rising orders due to the rise in US textile tariffs on China.

Nonetheless, Vietnamese producers and policymakers don’t see the commerce battle as an unalloyed win. 

Hanoi is already in Mr Trump’s crosshairs as its commerce surplus rises; it was up 43 per cent within the first 4 months of this 12 months, behind solely China, Mexico, Japan and Germany. Final month, Vietnam solely narrowly averted being labelled a foreign money manipulator by the US Treasury.

In the meantime, some exporters have sought to capitalise on Vietnam’s standing as a relative protected haven by relabelling Chinese language items as “Made in Vietnam” — a observe Vietnam’s customs division vowed earlier this month to crack down on. 

Balancing relations with the 2 nice powers is a preoccupation for Vietnamese producers, who’re nervous in regards to the unpredictability of the commerce battle — and of Mr Trump. 

Greenyarn’s Quach Kien Lan mentioned that the shift could possibly be “extra of a problem than [a] good” as a result of companies corresponding to his personal are investing in factories or shares with out understanding how — or whether or not — the dispute will likely be resolved.

“The commerce battle between China and America could be over on the finish of this 12 months, or it might proceed,” he mentioned. “And when it ends what’s going to occur? Vietnam and the US haven’t any commerce settlement. What’s going to occur to Vietnam then?

“We’re form of afraid of this commerce battle. How lengthy will it final?”


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