Vietnam has been completely underestimated. Now Vietnam has expressed its willingness to reduce tariffs to zero, and many people think that Vietnam is surrendering to the United States. However, such a view is undoubtedly a big mistake. Just think, if the United States imposes zero tariffs on Vietnam, and Vietnam imposes zero tariffs on the United States, what will be the result? The result will inevitably be that Vietnam's cost advantage in manufacturing becomes even more obvious.

Trump has been obsessed with bringing manufacturing back to the United States. Trump's idea of bringing manufacturing back is not only about high-tech returning to the U.S., but also hopes that some mid-level and low-end manufacturing can also be brought back. If both sides have zero tariffs, can American manufacturing compete with Vietnam at its current production costs? This is simply impossible. Vietnamese workers can earn a few hundred dollars a month and work overtime, can American workers do the same?

Trump talks about "reciprocal tariffs," while Vietnam proposes a solution: how about we just agree on reciprocal zero tariffs? On the surface, Vietnam seems to make concessions, but in reality? In fact, Vietnam's proposal is something that the U.S. dare not accept. To put it bluntly, although Vietnam says it wants the U.S. to cancel the additional taxes, this proposal actually puts the U.S. in a difficult situation.

If the U.S. and Vietnam negotiate, it is likely that the final plan in Trump's mind is for Vietnam to open industries that are not yet open to the U.S., such as communications, finance, and agriculture. Meanwhile, the U.S. would only slightly reduce tariffs on 46% of goods. In this way, the cake that the U.S. wants would be in its hands, and the U.S. would effectively impose additional taxes on Vietnam. Even if the additional tax is only 10% or 20%, these extra taxes will become revenue for the U.S. Treasury, and the U.S. will not lose anything. Therefore, Vietnam is not bowing down. Undoubtedly, there is still room for negotiation between the U.S. and Vietnam.

Original article: https://www.toutiao.com/article/1828646560258048/

Disclaimer: The article represents the views of the author alone.