Reference News Network July 9 report: On July 4, the Australia East Asia Forum website published an article by Chen Qing titled "Trump's Tariff Measures Loom, Vietnam Pursues Export Resilience." The translation is as follows:

Vietnam's trade surplus with the United States ranks fourth among all U.S. trading partners, reaching $123.5 billion in 2024. The large surplus is due to low production costs and cheap labor in Vietnam, which has promoted exports. On the other hand, the high value of American goods often exceeds the average spending level of Vietnamese consumers, limiting U.S. exports.

The United States imposes high tariffs on Vietnam, possibly out of concern that Vietnam may be used as a "transit country" or "third country," merely conducting minimal processing of Chinese goods, or being used as a tool for changing the origin of goods. Although there are cases where some goods are transshipped through Vietnam to the United States to avoid tariffs, such trade constitutes only a small portion of total U.S.-Vietnam trade. However, from the perspective of the Trump administration, high tariffs may be seen as a strategic move to address loopholes in U.S. trade policy.

It is evident that Trump's tariff policies will have a negative impact on Vietnam's economy, as the United States is currently Vietnam's largest export market, with bilateral trade exceeding $132 billion in 2024. Textiles, footwear, seafood, and wood products are popular exports to the United States. The total value of exports to the United States accounts for more than 30% of Vietnam's GDP.

High tariffs will increase the prices of Vietnamese goods exported to the United States. However, since many of these goods are essential items with high demand, American consumers may not be very sensitive to price changes. Therefore, the burden of tariffs may fall more on American importers and consumers.

Nevertheless, Vietnamese exporters still face pressure, as long-term tariff policies may reduce profit margins, hinder investment, and limit the ability to increase production. Vietnam remains a developing country, and with its current technological level, it is difficult to immediately offset the new tariffs by optimizing production costs. In the end, Trump's tariff policies harm both sides - American consumers pay more, while Vietnamese exporters face reduced profits and limited growth.

Trump's tariff measures will also significantly change the flow of foreign investment in Vietnam. In the past, multinational companies such as Nike and Intel favored Vietnam because of its cost competitiveness. Now, these companies are considering restructuring their supply chains and moving production lines to countries like India with lower tax rates.

The U.S. tariff plan increases the risk of a significant decline in new investments in Vietnam. This will in turn force companies to scale back operations or move factories, further reducing foreign direct investment. A reduction in investment will lead to large-scale unemployment in export-oriented industrial zones, threatening social stability. Moreover, the return of U.S. manufacturing will reduce the level of trade specialization and efficiency, potentially leading to higher production costs, lower product quality, and a decrease in global economic integration.

Trump's tariff policies will hinder the development of Vietnam's logistics and export industries. High tariffs are expected to temporarily reduce the demand for transportation services, causing excess capacity in logistics companies in terms of transportation, warehousing, and human resources. The resulting slowdown in growth will threaten employment in related support service sectors.

To minimize the negative impact of Trump's tariff plan, Vietnamese export companies should promote diversification of their export markets. Companies should make use of already signed free trade agreements to expand exports to European Union countries. Vietnam can also increase exports to other Asian Pacific countries through mechanisms such as the ASEAN Free Trade Area, the Regional Comprehensive Economic Partnership, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, thereby reducing reliance on the U.S. market.

At the national level, Vietnam should actively adjust its economic structure. Vietnam should focus on developing high-value-added industries, improve its logistics network and infrastructure. These measures can enhance Vietnam's competitiveness, reduce dependence on foreign enterprises, and lower trade costs. While promoting economic reforms, the Vietnamese government should increase diplomatic activities, strengthen and expand trade relations. This diversified strategy will help Vietnam maintain the development of its export industry in a fragmented global trade environment. (Translated by Liu Ziyuan)

Original article: https://www.toutiao.com/article/7525061183334793763/

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