Compared to other ASEAN countries Vietnam relatively safer from the China-US trade war
While many ASEAN countries might suffer from the trade dispute, Vietnam could see benefits
The threat of further escalation of global trade conflict might have strong implications for export-dependent ASEAN economies such as Singapore and Malaysia. In addition, Indonesia and Philippines can expect to face challenges funding the high level of their external debt due to the rising US dollar.
On the other hand, Vietnam’s proximity to China and strong economic ties (LINK) between the two countries play in Vietnam’s favor. Many companies in China being affected by the rise of US trade tariffs have already started or are looking into moving their production to other economies, such as Vietnam.
[Vietnam and China are linked through the ASEAN - China FTA]
[Vietnam is China’s biggest trading partner in ASEAN]
According to Angelo Cheung, a senior executive for Aoyagi, a Japanese electronics group that manufactures in China, some orders from the U.S. had already been halted because of the increasing uncertainty. Mr. Cheung mentioned that his company is looking into moving a part of its supply chain to Vietnam. Bloomberg has already wrote that with the tariffs on made-in-China products are set to rise, countries such as Vietnam or Cambodia are becoming more attractive than ever for US-based consumer good producers that are manufacturing in China.
The world’s two largest economies have imposed tariffs on $50 billion of each other’s goods since July, despite several rounds of negotiations.