Apr 3 2025, 06:13 PM, updated 9 months ago
QUOTE
Supply chain hit
Trump also imposed heavy tariffs, ranging from 46% to 49%, on Vietnam, Laos and Cambodia.
This represents "a full-frontal assault on Beijing's extended supply chain," said Stephen Innes from investment firm SPI Asset Management.
"Vietnam... and others in the periphery are collateral damage in what is shaping up to be the most aggressive realignment of US trade policy in a generation," he added. "This isn't tit-for-tat - it's strategic containment via tariff warfare."
Laos and Cambodia, which are among the poorest countries in the region, are heavily dependant on Chinese investment in supply chain infrastructure. The high tariff rates are expected to hit both countries hard.
China is Vietnam's largest trading partner. It was one of the key beneficiaries of US-China tensions during Trump's first term.
In 2018, Trump hit China with tariffs, causing some businesses to rethink where they made their products. Some chose to shift manufacturing to Vietnam.
This has led to an increase of exports from Vietnam to the US, with Chinese companies that have moved production to there contributing to that figure.
"Vietnam was clearly targeted [by Trump] due to its role as a conduit for China's circumvention of previous tariffs", former US trade negotiator Stephen Olson told the BBC.
While the US remains Vietnam's biggest export market, China is its largest supplier of goods, accounting for more than a third of imports, according to the latest official data.
Chinese firms were also behind nearly one in every three new investments in Vietnam last year.
Pushan Dutt, a professor at the INSEAD business school, said the new taxes on South East Asia will be "prohibitive" for China.
"China has a problem with demand and in the last Trump administration their firms had nimbly reacted to tariffs by rejigging supply chains and moving them to [South East Asian Nations]. This door has been slammed shut," he added.
Trump also imposed heavy tariffs, ranging from 46% to 49%, on Vietnam, Laos and Cambodia.
This represents "a full-frontal assault on Beijing's extended supply chain," said Stephen Innes from investment firm SPI Asset Management.
"Vietnam... and others in the periphery are collateral damage in what is shaping up to be the most aggressive realignment of US trade policy in a generation," he added. "This isn't tit-for-tat - it's strategic containment via tariff warfare."
Laos and Cambodia, which are among the poorest countries in the region, are heavily dependant on Chinese investment in supply chain infrastructure. The high tariff rates are expected to hit both countries hard.
China is Vietnam's largest trading partner. It was one of the key beneficiaries of US-China tensions during Trump's first term.
In 2018, Trump hit China with tariffs, causing some businesses to rethink where they made their products. Some chose to shift manufacturing to Vietnam.
This has led to an increase of exports from Vietnam to the US, with Chinese companies that have moved production to there contributing to that figure.
"Vietnam was clearly targeted [by Trump] due to its role as a conduit for China's circumvention of previous tariffs", former US trade negotiator Stephen Olson told the BBC.
While the US remains Vietnam's biggest export market, China is its largest supplier of goods, accounting for more than a third of imports, according to the latest official data.
Chinese firms were also behind nearly one in every three new investments in Vietnam last year.
Pushan Dutt, a professor at the INSEAD business school, said the new taxes on South East Asia will be "prohibitive" for China.
"China has a problem with demand and in the last Trump administration their firms had nimbly reacted to tariffs by rejigging supply chains and moving them to [South East Asian Nations]. This door has been slammed shut," he added.
https://www.bbc.com/news/articles/cgm8vxevyplo
This post has been edited by diffyhelman2: Apr 3 2025, 06:14 PM
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