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Trade war may prove double edged for Vietnam

Chinese businesses may export their goods through Vietnam to the US amid the trade war. They can also set up factories in Vietnam and manufacture products with materials imported from China. Chinese garment products would be labeled as made in Vietnam and exported to the US.

This will result in bad consequences for Vietnam’s textile and footwear industry as the US might impose the same tariffs on Vietnam as it does on China. Vietnam’s industry feels if products’ origin is not traced and violations are not penalized, it will have to suffer consequences. In May this year the US slapped anti-dumping duties of 199.76 per cent and countervailing duties of 256.44 per cent on imports of cold-rolled steel produced in Vietnam using Chinese-origin substrate.

But the escalating trade war will create opportunities for Vietnamese exporters of consumer goods to expand their market share in the US. About 27 per cent of Chinese goods set to be affected by the new tariffs are consumer goods, and Vietnam exports many similar items to the US. Apart from footwear and textile products, other products to benefit from the trade war are wooden furniture, electronics, sports equipment, and toys. The US has been Vietnam’s largest trading partner this year.