Vietnam braces for fallout from US tariffs on Chinese goods

WASHINGTON — 

Vietnamese Prime Minister Pham Minh Chinh instructed his Cabinet to hole for a imaginable planetary commercialized warfare aft U.S. President Donald Trump imposed tariffs of 10% connected each Chinese products.

"Prepare for the anticipation of a satellite commercialized warfare this year," the premier curate said astatine a Cabinet gathering connected Wednesday, according to the Dan Tri online newspaper.

Pham spoke aft Trump announced a intermission successful his threatened tariffs against Mexico and Canada for 30 days.

Pham told the Cabinet that the concern successful the satellite and the portion was "developing precise unpredictably, straight affecting our country, particularly connected exports, accumulation and business, and the macro economy."

He emphasized that if a planetary commercialized warfare were to occur, with countries imposing retaliatory tariffs connected each other's exports, it could disrupt proviso chains and shrink the country's export markets, posing important risks to Vietnam's economy.

Pham did not specifically notation Trump's tariffs connected products from China, a strategical commercialized spouse and a neighboring state of Vietnam.

There are worries that Trump's tariffs whitethorn origin rising merchandise prices and reduced user purchasing powerfulness successful Vietnam, a highly unfastened system that relies heavy connected exports and overseas nonstop investment, with China arsenic its starring commercialized partner.

Vietnamese businesses and consumers are bracing for U.S. tariffs connected China to thrust up the costs of immoderate goods arsenic the state imports machinery and physics devices, specified arsenic computers and cellphones, from the U.S., with elements oregon pieces that originated from China.

The state volition besides apt person to header with unit from Beijing to import much Chinese products, analysts said.

"Vietnam whitethorn beryllium nether unit to import much products from China arsenic Chinese products are levied higher tariffs by the U.S.," Nguyen Quang A, an economical governmental perceiver and businessman successful Hanoi, told VOA this week.

Others foretell that arsenic American markets adjacent to Chinese companies, they volition progressively crook to determination trading partners, similar Vietnam.

In 2024, Vietnam's exports to China totaled $61.2 billion. Meanwhile, imports from China surged to $144 billion, according to the Vietnam Chamber of Commerce and Industry.

With the United States, the concern is reversed, with Vietnam's commercialized surplus successful 2024 exceeding $123 billion, Reuters reported.

According to analysts, Hanoi's pledges to import much from the U.S. arsenic good arsenic different offsetting measures could spare Vietnam from the Trump administration's tariffs.

Nguyen noted a large hidden hazard for Vietnam is that Chinese companies are mounting up factories successful Vietnam to import products for re-export, meaning they would repackage Chinese products with minimal labour by inexpensive Vietnamese workers and export them nether the "Made successful Vietnam" statement to debar tariffs.

"Chinese businesses [are] moving to Vietnam and are processing their imported materials from China and past labeling their products arsenic 'Made successful Vietnam' earlier exporting to the U.S. The U.S. volition decidedly analyse this contented carefully," Nguyen said.

Vietnam, which has agelong had geopolitical tensions with China, whitethorn look the hazard of imaginable reprisal measures from China arsenic Beijing said it would enforce retaliatory tariffs connected immoderate U.S. goods arsenic soon arsenic adjacent week.

However, Vietnam seemed to triumph large successful Trump's first-term commercialized warfare with China arsenic the Southeast Asian state attracted manufacturers wanting to debar Chinese tariffs.

If Trump's tariffs are extended to Vietnam, the economical effects could ripple done commercialized balances, speech rates, proviso chains and overseas nonstop investment, said Vo Tri Thanh, erstwhile vice president astatine the Central Institute for Economic Management and a subordinate of the National Financial and Monetary Policy Advisory Council, penning successful Vietnam News.

The sweeping tariffs person triggered the improvement of goods being stockpiled successful Vietnam and successful the portion to debar taxation hikes, driving up request for instrumentality shipping and pushing freight costs to caller highs.

Despite these pressures, Vietnam whitethorn find itself positioned to capitalize connected planetary proviso concatenation shifts, Nguyen Hong Dien, Vietnam's curate of manufacture and trade, told Tuoi Tre Online, explaining that the state could pull much concern successful high-value sectors.