US pushes Vietnam to decouple from Chinese tech, sources say

[sambody]

In about 10 years time when dedollarization will be in full swing, US won't have any money to spare to import anything from Vietnam. The 30% will shrink down to a much smaller number. It's best for Viets to cast their lot with Chinese now instead of facing their wrath in a few years.

Deddollarisation has been ongoing since the Plaza Accord.

Vietnam is free to decide what it wants to do. No one is forcing them to sign a trade deal. It is their government which has been trying to engage the Trump administration which has limited bandwidth because so many countries are lining up for trade deals.

 

[ety]

Customer is king and for each of these countries the US is the most important export market. China is currently the lowest cost producer because of economies of scale but tariffs are desgined to disrupt that dynamic.

No, even in just exports, the biggest export market by country for South Korea, Australia and GCC countries is China by far. Countries import stuff because they need the products too, not unimportant in any way, that's way US is scared that China will not supply the commercial products to US and you can't get them from any other sources in the trade war and so wants a trade deal with China quickly.

 

[Viet]

It is realpolitik. Anyway, the US has a rules based system. President Trump's decisions are regularly challenged and overturned in US courts. No exporter in China can dare to take the CCP or Chairman Xi's regime to court againt arbitrary export restrictions imposed by them.

you seriously think we will redo supply chain away from China, allying with the US for free? thats delusional.
Vietnam would demand military and economic assistance at least on the same level of USSR and Washaw pact. we are brave but not dumb.
what would the US do?
Stop all import from Vietnam?
sorry to tell we are self sufficient in foods. we only need 3 meals a day. nothing else.

 

[sambody]

The reality now is that no country other than the UK has a trade deal with the US. Even Japan has reached an economic agreement with China to deal with the US “blackmail” on the world.

The US is now the country that has been abandoned by the world. The reason why these countries do not reach an agreement with the United States is that they all believe that China will win and the United States will lose.

Not true at all. Firstly, trade deals take time to negotiate. Secondly, the Court of International Trade has ruled against some of the recent tariffs. It is understandable that trading partners want to wait and see how that plays out. No country would want to make concessions to avoid tariffs if those tariffs would be declared illegal by the appellate courts in the future anyway.

 

[SaadH]

Deddollarisation has been ongoing since the Plaza Accord.

Vietnam is free to decide what it wants to do. No one is forcing them to sign a trade deal. It is their government which has been trying to engage the Trump administration which has limited bandwidth because so many countries are lining up for trade deals.

Yeah, like Japan was "not forced" to devalue it's currency in the 80's. Now it's committing a mass harakiri event and won't survive as a nation in about 50 years time.

 

[MH.Yang]

Deddollarisation has been ongoing since the Plaza Accord.

Vietnam is free to decide what it wants to do. No one is forcing them to sign a trade deal. It is their government which has been trying to engage the Trump administration which has limited bandwidth because so many countries are lining up for trade deals.

Nobody's in line. Everyone knows it. In fact, you know it.

They're just laughing and watching how you MAGA's are going to get something from China.

 

[sambody]

you seriously think we will redo supply chain away from China, allying with the US for free? thats delusional.
Vietnam would demand military and economic assistance at least on the same level of USSR and Washaw pact. we are brave but not dumb.

I dont have an opinion on that, but the UK has already signed such an agreement and many countries in Asia would also likely be willing to sign similar ones. It is for Vietnam to decide which camp it wants to be in, but there wont be any bribes from the US. There is a reason Vietnam has the highest reciprocal tariff rate after China.

 

[ChineseTiger1986]

I dont have an opinion on that, but the UK has already signed such an agreement and many countries in Asia would also likely be willing to sign similar ones. It is for Vietnam to decide which camp it wants to be in, but there wont be any bribes from the US. There is a reason Vietnam has the highest reciprocal tariff rate after China.

China always uses Made in Vietnam or other nations' sticker in its products.

It is an open secret.

It doesn't matter, China is nearly controlling all products ranged from low end to high end.

Now, there are only the last two strongholds like semiconductor (2-3 years) and commercial airliner (5-10 years).

Even the Japan at its peak was only China's Mini-Me.

 

[MH.Yang]

Not true at all. Firstly, trade deals take time to negotiate. Secondly, the Court of International Trade has ruled against some of the recent tariffs. It is understandable that trading partners want to wait and see how that plays out. No country would want to make concessions to avoid tariffs if those tariffs would be declared illegal by the appellate courts in the future anyway.

How much time do trade negotiations take? Look at Trump and China, which has already ended negotiations twice. Accept the reality, dude. these countries are just waiting for China to crush the US and then carve up the US corpse together, they are not going to buy Trump's 100 year old zero interest national debt.

As for the MAGA's fantasizing about replacing China, I'll just mention one very simple thing. China generates 9.2 trillion kilowatts of electricity, more than the top 100 countries in the world excluding China combined. This is the amount of generating capacity that it took China fifty years of infrastructure development to achieve, and this is the necessary infrastructure for China's industrial system. How, pray tell, will the United States solve the problem of generating power for China's replacements, and how long will it take to do so?

In the other direction, China's domestic market is expanding rapidly. It won't take much time to replace the US as the world's largest market.

 

[sambody]

China always uses Made in Vietnam or other nations' sticker in its products.

It is an open secret.

It doesn't matter, China is nearly controlling all product ranged from low end to high end.

Now, there are only the last two strongholds like semiconductor (2-3 years) and commercial airliner (5-10 years).

The whole point of the trade war is to isolate China. So, the US will obviously not allow any arrangement which allows China to continue to use Vietnam as a backdoor into the US market - which you yourself have stated is an open secret.

 

[ChineseTiger1986]

The whole point of the trade war is to isolate China. So, the US will obviously not allow any arrangement which allows China to continue to use Vietnam as a backdoor into the US market - which you yourself have stated is an open secret.

Sadly, the US has lost its functionality to compete with China.

You won't even have a meaningful manufacturing base without China's rare earth supply chain.

With or without sanctions, the Chinese products have been rampant up like Agent Smith.

It cannot be deleted, not even diminished.

Most Chinese products have not been replaced, but using a different sticker like Made in Vietnam, Made in Thailand, Made in Malaysia, etc.

 

[sambody]

How much time do trade negotiations take? Look at Trump and China, which has already ended negotiations twice. Accept the reality, dude. these countries are just waiting for China to crush the US and then carve up the US corpse together, they are not going to buy Trump's 100 year old zero interest national debt.

As for the MAGA's fantasizing about replacing China, I'll just mention one very simple thing. China generates 9.2 trillion kilowatts of electricity, more than the top 100 countries in the world excluding China combined. This is the amount of generating capacity that it took China fifty years of infrastructure development to achieve, and this is the necessary infrastructure for China's industrial system. How, pray tell, will the United States solve the problem of generating power for China's replacements, and how long will it take to do so?

In the other direction, China's domestic market is expanding rapidly. It won't take much time to replace the US as the world's largest market.

The time a deal takes depends on the complexity and exigency. No country other than China is currently paying more than the 10% baseline tariff and the Trump admin seems willing to extend that as well. When other countries start facing the kind of tariffs China is, deals will get stuck quickly.

In the 1980s, the conventional wisdom was that Japan would overtake the US economy. China is having a similar Japan moment, except that its GDP per capita has not reached rich country levels like Japan's had.

Overcapacity and demographics are against China. Once its export machine shuts down, its economy will only grow at sputter speed.

 

[ety]

The time a deal takes depends on the complexity and exigency. No country other than China is currently paying more than the 10% baseline tariff and the Trump admin seems willing to extend that as well. When other countries start facing the kind of tariffs China is, deals will get stuck quickly.

In the 1980s, the conventional wisdom was that Japan would overtake the US economy. China is having a similar Japan moment, except that its GDP per capita has not reached rich country levels like Japan's had.

Overcapacity and demographics are against China. Once its export machine shuts down, its economy will only grow at sputter speed.

US only accounts for 14.7% of total Chinese exports now, and will be even less in the coming years. So the impact of trade decoupling from US will be contained.

 

[Viet]

I dont have an opinion on that, but the UK has already signed such an agreement and many countries in Asia would also likely be willing to sign similar ones. It is for Vietnam to decide which camp it wants to be in, but there wont be any bribes from the US. There is a reason Vietnam has the highest reciprocal tariff rate after China.

UK is far away it can decouple from China but we can’t. you don’t see the difference? you can’t choose the neighbours.
the best offer I think Vietnam can make is buying more US goods, services, weapons. we can move parts of factory and manufacturing to the US.
worst case scenario: no deal, then be it. let see who suffers more, seller or buyer.

 

[sambody]

US only accounts for 14.7% of total Chinese exports now, and will be even less in the coming years. So the impact of trade decoupling from US will be contained.

Yes, but some of that decline in US share has been masked by using countries like Vietnam and Mexico to re-export to the US. But I agree that the best path for China is to stimulate local demand and wean itself off export based growth. The problem.os

UK is far away it can decouple from China but we can’t. you don’t see the difference? you can’t choose the neighbours.
the best offer I think Vietnam can make is buying more US goods, services, weapons. we can move parts of factory and manufacturing to the US.
worst case scenario: no deal, then be it. let see who suffers more, seller or buyer.

I am not a polcy or decision maker, so whether I understand your point of view or not is irrelevant. I am just explaining what the underlying rationale behind US policy actions is.

The US sees China as the major strategic rival and dependence on Chinese supply chains as a security threat. It cant be fixed in the short-term , but in the long run, reducing that dependence is a strategic imperative. The US wouldn't mind diversying away from China to Vietnam, but not if all that means is that the dependence on Chinese labels is being hidden under a Vietnamese label. Everyone can figure out the correlation between rising Chinese exports to Vietnam and rising Vietnamese exports to the US.