Analysis: US Increases Tariffs on China, Leading to Surge in Imports from Vietnam, a Country Dependent on Chinese Goods

The United States’ trade strategy to reduce reliance on China by increasing tariffs has inadvertently led to a significant boost in imports from Vietnam, according to recent data. This surge in trade between China, Vietnam, and the U.S. has resulted in a widening trade imbalance, with Vietnam posting a surplus with the U.S. close to $105 billion last year.

Vietnam now holds the fourth-highest trade surplus with the United States, trailing only behind China, Mexico, and the European Union. The symbiotic relationship between Vietnam and China is evident in the trade, customs, and investment data reviewed by Reuters, as well as estimates from the World Bank and various experts.

The surge in Chinese imports into Vietnam coincides with the increase in Vietnamese exports to the U.S., leading some experts to speculate that Chinese firms may be using Vietnam to circumvent U.S. tariffs on their goods. This could potentially result in tariffs being imposed on Vietnam after the upcoming U.S. elections.

Despite the growing trade imbalance, Vietnam continues to seek market economy status in Washington, especially after President Joe Biden’s efforts to strengthen diplomatic ties with the country. The surge in U.S. imports from Vietnam last year, totaling over $114 billion, highlights the Southeast Asian nation’s appeal to manufacturers and traders looking to diversify away from China amid trade tensions.

As the trade dynamics continue to evolve, analysts suggest that U.S. policy towards Vietnam may change post-election, potentially impacting import costs. The U.S. Embassy in Hanoi declined to comment on the trade imbalances, while Vietnam’s foreign and trade ministries did not respond to requests for comment. China’s commerce ministry also did not provide an immediate response.