Vietnam Used to Be a Safe Haven for Trade. Now It Might Not Be.
During President Trump’s first U.S.-China trade war in 2018, American companies flocked to Vietnam to sidestep escalating tariffs, and the country became increasingly critical to their bottom lines.But in Mr.Trump’s escalating trade fight across the globe, Vietnam has become a new target.
Tensions were so high that there were doubts about whether American diplomats would attend Wednesday’s events commemorating the 50th anniversary of the end of the Vietnam War.Here’s how some U.S.businesses have come to rely on the country:Nike now produces half of its shoes in Vietnam and supports nearly half a million workers across 162 supplier factories.Apple, via contract manufacturers, employs more than 200,000 workers at 35 facilities.
Apple suppliers have been offering sign-on bonuses and free housing to Vietnamese workers to support production.Firms like Intel and SpaceX have recently announced plans to expand in the country.In March, Vietnam welcomed the largest-ever delegation of American businesses — over 60 firms in total, including Apple, Boeing and Amazon — to explore opportunities for deepening ties to the country.In all, American firms have enjoyed the benefits of cheaper Vietnamese manufacturing and calmer geopolitics.That changed in April when Mr.Trump declared a 46 percent tariff on goods coming from Vietnam, some of the harshest duties imposed on any country.
Trump administration hard-liners like Peter Navarro, his top trade adviser, and U.S.Trade Representative Jamieson Greer have made Vietnam into a punching bag.
They have complained about the United States’ $124 billion trade deficit with Vietnam and accused the country of being little more than a waypoint for Chinese-made goods as a way to avoid the steep tariffs.Mr.Navarro has also criticized Vietnam’s value-added tax system, or VATs, which are common outside the United States and are essentially a local consumption tax.
He claims it benefits Vietnamese exporters at the expense of Ameri...