AmiSight 7/21: Chinese Manufacturers Set up Shop in Vietnam to Avoid High Tariffs
- Ami Kassar
- Jul 21
- 2 min read
Chinese companies are trying to avert Trump’s steep tariffs by taking their production to other countries, such as Vietnam, where tariffs are lower, The Wall Street Journal reports. Goods made in China generally face tariffs of 40%-50% when imported into the United States, while Vietnam is a relative bargain with a new tariff rate of 20%.
While Trump administration officials have urged Southeast Asian nations to take a hard line on economic ties with China—including discouraging Chinese companies from establishing manufacturing and export operations—China (including Hong Kong) has already launched more than 800 new investment projects in Vietnam this year.
While they are saving money on lower tariffs for now, the Chinese companies are facing other hurdles as they set up shop in Vietnam. For starters, the intense heat and humidity of the region saps worker productivity. Also, the work culture is different as Vietnamese workers tend to stick to standard hours rather than show up early like the Chinese. Importing raw materials from China to Vietnam is also expensive.
Trump has pledged a double tariff rate of 40% on foreign goods transshipped through Vietnam, he hasn’t specified what counts as transshipment.
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