Chinese factories in Vietnam hammered by US tariffs: ‘where can I go now?’
Chinese exporters flocked to Vietnam to avoid US tariffs aimed at China, but Vietnam is now also facing a steep rise in duties
Jayson Wu, the Chinese owner of a furniture factory in Hanoi, has no idea what he will do if US President Donald Trump goes ahead with his unprecedented “Liberation Day” tariffs.
The plan – which will raise US duties on goods from Vietnam by 46 per cent – has not come into effect yet, but it has already hit his business like a bomb.
“My US clients have cancelled all their orders, and the factory has come to a standstill,” Wu said. “I can only wait to see what happens with the tariffs on the 9th. Otherwise, where can I move the factory now? Most Southeast Asian countries are also facing tariffs.”
Wu is one of many Chinese business owners in Vietnam who find themselves facing a dilemma as Trump threatens to launch a full-blown global trade war.
For Chinese businesses, Vietnam offered a way to avoid US duties aimed at China, as well as low labour costs, cheap rent, and stable trade relations with China thanks to the Regional Comprehensive Economic Partnership (RCEP).
A string of major Chinese companies including electronics firm TCL Technology and electric vehicle maker BYD set up new facilities in Vietnam, with Chinese investment in the country surging 77.6 per cent year on year to reach US$4.47 billion in 2023.