US-China trade war is a gift that keeps on giving for Vietnam
- Southeast Asian country’s manufacturing and export boom shows no sign of letting up as businesses try to offset cost of tariffs on Chinese-made products
Foreign investors have continued to flock to Vietnam’s factory districts as the trade war between the United States and China approaches its second year.
US President Donald Trump’s threats to deepen the US-China trade war with further tariffs could accelerate the inflow of manufacturing investment, but those who have chosen to “wait and see” so far my face a more competitive environment as factory districts fill up, analysts have said.
Many manufacturers in China considered shifting more production to Southeast Asia after the two sides started their tariff tit-for-tat, fearing the impact of higher levies on Chinese-manufactured goods on sales to the US market.
Vietnam has become a favoured site for investors fleeing rising labour costs in China, and the threat of tariffs.
“The trade war is speeding up a trend that was already well under way, namely to move factories out of (more expensive) China,” said Adam McCarty, chief economist at Mekong Economics in Hanoi.
“It is hard to say how many of the new factories would have to come to Vietnam without a trade war.”