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Trade-war winner Vietnam is now a target for Trump’s tariffs
HANOI: Vietnam’s recent fame as a big winner of the U.S.-China trade war may be bringing it unwanted attention from President Donald Trump.
When asked in an interview with Fox Business Network if he wanted to impose tariffs on Vietnam, Trump said: “Well, we’re in discussions with Vietnam. Vietnam is almost the single worst — that’s much smaller than China, much — but it’s almost the single worst abuser of everybody.”
Just last month, the U.S. Treasury added Vietnam to a watchlist of countries it’s monitoring for possible currency manipulation. The nation’s benchmark VN Index slumped 1.7% Thursday, to the lowest since Feb. 12.
Vietnam has benefited from a surge in exports and foreign investment as businesses look to scale back their China operations or relocate to avoid higher U.S. tariffs. But it’s also fighting claims that Chinese exporters are routing their goods via Vietnam and slapping fake labels on their products to bypass the tariffs.
Greater scrutiny from the Trump administration could be uncomfortable for trade-dependent Vietnam. Its trade surplus with the U.S. has exceeded $20 billion since 2014, reaching $39.5 billion last year for the highest in records going back to 1990, according to U.S. Census Bureau data.
“There is a risk to Vietnam,” said Nestor Scherbey, a licensed U.S. customs broker and consultant based in Ho Chi Minh City. “Thirty percent of Vietnam’s imports are Chinese material and components used for manufacturing in final products that are then exported. That’s an area of risk.”
The Southeast Asian nation has been taking steps to avoid U.S. ire. Vietnam said earlier this month it will impose higher penalties on Chinese goods transferred to the country and illegally relabeled as made-in-Vietnam for export to the U.S.
Vietnam’s Ministry of Foreign Affairs didn’t immediately respond to questions seeking its view on Trump’s comments. – Bloomberg