Why the Vietnam ‘detour’ for US-bound Chinese goods hit a dead end
Is finding another Hanoi haven possible, or would trying be a fool’s errand for Chinese firms looking to get the jump on Trump and evade tariffs?
Nearly a decade ago, one of China’s largest textile exporters concocted a plan to hedge against trade barriers championed by US President Donald Trump during his first term.
Its owners were convinced that moving their primary production base from China’s east coast to Vietnam would be a permanent workaround – bypassing complex supply-chain pitfalls by hunkering down in a tariff lowland and continuing to stock Walmart shelves with socks and towels.
Trying to get the jump on Trump in 2017, from Vietnam’s Hung Yen province, initially yielded high returns for Jasan Group in tariff savings. And the textile exporter watched as its peers back in China became embroiled in seemingly endless trade upheavals between Beijing and Washington.
Then, in recent months, a dramatic turnaround upended the company’s strategy. Contracts were hastily cancelled amid a full investment retreat from Vietnam, according to reports by some state media outlets and business publications in China.
The sudden reversal came after Jasan in September announced a fresh factory investment in Vietnam’s Thanh Hoa province, only to abandon the plan in February.
The 180 million yuan (US$26.6 million) project was intended to churn out 60 million socks primed for the United States each year. In a Shanghai Stock Exchange filing, Jasan blamed delayed land acquisition and recent “uncertainties in operation and export prospects” for the pullback.