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30 Jun, 2019 15:03

Trump’s threat makes Vietnam sweat after reportedly cashing in on US-China trade war

Trump’s threat makes Vietnam sweat after reportedly cashing in on US-China trade war

Vietnam, described by some as the real winner in Washington’s trade row with Beijing, is trying to soothe the US after President Donald Trump blasted its trade practices, calling it “even worse” than China.

It was reported earlier this month that the country in southeast Asia had emerged as the main beneficiary from the tit-for-tat tariff war between the world’s two biggest economies. In a bid to dodge the levies and scupper Trump’s efforts to cut the American trade deficit, some exporters are believed to have shipped goods to Vietnam, which then sent them to the US.

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Vietnamese trade data shows that such reports could be true. For example, imports of Chinese computer and electronic goods by Vietnam surged by more than 80 percent to $5.1 billion in the first five months of 2019. During the same period, there was a similar increase of nearly 72 percent in the volume of the same goods exported from Vietnam to the US, according to the WSJ. 

Overall, exports to the US from Vietnam jumped nearly 30 percent from January through May. 

Another report found that the southeast Asian nation gained 7.9 percent of its GDP as it increased exports to both China and the US. 

Exporters seeking to dodge tariffs also have been caught illegally relabeling goods of Chinese origin as “Made in Vietnam.” Vietnam’s customs agency has already vowed to crack down on the practice, stepping up control and imposing penalties on businesses for such actions. 

All of this has been enough to draw the ire of the US president. “Vietnam is almost the single worst – that’s much smaller than China, much – but it’s almost the single worst abuser of everybody,” Trump said on Wednesday, adding that the two countries are currently in trade talks.

Notably, it seems that Trump was aware that Vietnam may have gained from the US-Beijing trade spat. In his tweet storm in May, he said that many “tariffed companies will be leaving China for Vietnam and other such countries in Asia,” but did not accuse Hanoi of any unfairness.

Following the US threat and apparently in fear of losing access to the lucrative American market, Vietnam rushed to assure its overseas partner that it wanted a free and mutually beneficial trading relationship.

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“Vietnam seeks to further economic, trade and investment ties with the United States which promote freedom and fairness, based on mutual benefits,” Vietnam’s Foreign Ministry spokesperson Le Thi Thu Hang said on Friday.

The US’ trade deficit with Vietnam stood at $39.5 billion last year. In an apparent attempt to address it, Hang said that the country “made efforts to improve the bilateral trade balance” and promote the importation of US goods to Vietnam.

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