Many Vietnamese were surprised by the words that US President Donald Trump dedicated to Vietnam during the G20 summit in Japan.
The Asian country is, for the US, one who “abuses more of the whole world” commercially. His words made many believe that sanctions against Vietnam were just around the corner.
Especially because the United States attributes to the trade deficit with China the increase in tariffs on its exports and the trade deficit with Vietnam is much greater and is growing steadily. The first five months of 2019 have been enough to reach 17,000 million dollars, which represents a 32.8% greater deficit than during the same period of 2018. Precisely in 2018, that deficit reached a record figure of 39.5 million dollars; the largest of the last 28 years.
Why is the trade deficit between the United States and Vietnam so large?
The production of a number of companies that previously manufactured in China has moved to Vietnam to avoid the high tariffs of the United States on Chinese imports. And it’s a trend that has been going on for quite some time now. Vietnam feels like the winner of the commercial war.
Examples are, in mid-2019 companies have taken the necessary steps to ensure that some of the processes of assembling its products are carried out in India and Vietnam, and not in China as before. The footwear company Brooks, announced in May that it will move a factory in China to Vietnam. Samsung is ready to close its last factory in China and increase its production in the Asian country.
Why the US is losing its trade wars
In some cases, the ‘Made in China’ brand has been directly eliminated and ‘Made in Vietnam’ has been chosen to avoid, once again, tariffs at the US borders.
So the US Department of Commerce imposed tariffs of 456% on imports of stainless steel and cold rolled steel from Vietnam. And at the same time, the Department itself knows, following its own commercial reports, that these products are actually manufactured in South Korea and in Taiwan and then sent to Vietnam to undergo some minor treatment before being exported to the United States. as a Vietnamese product. But steel manufactured entirely in Vietnam will not be affected by the new tariffs.
The same thing happened with Chinese steel, explains Vladimir Mazirin, director of the Center for Vietnamese and ASEAN Studies of the Russian Academy of Sciences, told Middle East Headlines News team.
“In 2015, when the Obama Administration introduced tariffs against unfair competition from Chinese cold rolled steel producers, these products were only minimally refined in Vietnamese factories and then exported to the US,” He revealed.
Tariffs on South Korean and Taiwanese products were introduced in December 2015 and February 2016. From then until April 2019, shipments of stainless steel and cold-rolled steel products from Vietnam to the United States increased respectively 332% and 916%.
The Vietnamese authorities have tightened controls on the origin of the goods being exported and Trump welcomed the determination of Vietnam and its measures to combat commercial fraud.
And now? “It is clear that Washington will closely monitor Vietnamese exports,” says this individual.
“What the US does from now on will be a reflection of how valuable Hanoi is to them as the main ally in Southeast Asia,” he says, adding that the conflict is a much more serious challenge for Vietnam: will it be able to assume the global factory role held by China?.