Ảnh hưởng của chiến tranh thương mại Mỹ Trung đến xuất khẩu hàng hoá Việt Nam sang Mỹ

DA NANG UNIVERSITY OF ECONOMICS
INTERNATIONAL BUSINESS FACULTY



SCHEME

IMPACT OF THE U.S. – CHINA TRADE DISPUTE ON
VIET NAM’S MERCHANDISE EXPORTS TO THE U.S.

Instructor:

PhD. Huynh Thi Dieu Linh

Author:

Ly Thanh Hang

Class:

42K01.3CLC

Da Nang, November 2019.


LIST OF CONTENTS
ABSTRACT..................................................................................................................................................1
CHAPTER 1. INTRODUCTION ...............................................................................................................2
CHAPTER 2. CONTEXT OF THE U.S. – CHINA TRADE DISPUTE .................................................4
2.1.

Main reasons ................................................................................................................................4

2.1.1.

The U.S. trade deficit with China ........................................................................................................... 4

2.1.2.

Intellectual properties rights violation .................................................................................................... 6

2.1.3.

Threatens to global position.................................................................................................................... 8

2.2.

Retaliations from both sides – tariff measures ..........................................................................9

CHAPTER 3. ANALYSING IMPACT OF THE U.S. – CHINA TRADE DISPUTE ON VIET
NAM’S GOOD EXPORTS TO THE U.S. ...............................................................................................12
3.1.

Merchandise exports from Viet Nam to the U.S. before 2018 ...............................................12

3.1.1.

Trade relations ...................................................................................................................................... 12

3.1.2.

Merchandise export structure ............................................................................................................... 14

3.1.3.

Notices for Vietnamese exporters before 2018 .................................................................................... 15

3.2.

Merchandise exports after 2018 ...............................................................................................16

3.2.1.

Why the U.S. – China trade dispute relates to Viet Nam? ................................................................... 16

3.2.2.

Changes in merchandise exports structure ............................................................................................. 2

3.2.3.

Issues arised under the impact of the trade dispute ................................................................................ 6

CHAPTER 4. CONCLUSION ....................................................................................................................9
LIMITATIONS ..........................................................................................................................................10
REFERENCES ..........................................................................................................................................11

i


LIST OF CHARTS

Chart 1. Annual U.S. trade deficit with China ................................................................................. 6
Chart 2. Growth in merchant trade between Viet Nam and the U.S. from 2001 to 2017 .............. 13
Chart 3. Goods exported structure from Viet Nam to the U.S. in 2017......................................... 14
Chart 4. The U.S. imports value from China before and after the trade dispute initiation ............ 16
Chart 5. Viet Nam export structure to the U.S. in 2018 and 2019 (year-to-date value) in US Dollar
......................................................................................................................................................... 3

LIST OF TABLES
Table 1. The U.S. and China tariff measures ................................................................................. 11
Table 2. Growth ranking of merchandise exported from Viet Nam to the U.S. in Thousand US
Dollars .............................................................................................................................................. 5

ii


ABSTRACT
China and the United States are on the brink of tensions with each other on trade issues. They take
turn to execute measures to cause difficulties for each other to do business not only to themselves
but to the other parts of the world. Vietnam has tight bounds with both the U.S. and China since a
very long time so Vietnam is also affected by the trade dispute. The United States, who initiated
trade tensions with China, has strong ties with Vietnam, especially in economic matters. This
scheme analyzes the U.S. motivations when directly starting the tension with China, thereby
looking closely at the impact that Vietnam has on exports to the U.S. What do Vietnam's exports
to the U.S. gain and lose in such context? and Is the United States targeting Vietnam because of its
criticism in the same way that it has aggression against China? This project has studied and found
that besides the positive trends in Vietnam's exports to the US, reflected in the mutant trade data in
2018 and until September 2019, it still exists many arised issues may be the driving forces for the
U.S. tensions with Vietnam. The situation between Vietnam and the United States is relatively
similar to the relationship between the United States and China earlier, which is partly from a
neighbor trying to avoid the loss of trade protectionism that the U.S. projected directly to China.

1


CHAPTER 1.

INTRODUCTION

China and the United States have developed their economic relations for the last three decades,
while total goods transactions increased significantly from $2 billions USD in 1979 to $579 billions
USD in 2016. In spite of such mutual dependence, intensive dispute has also been upraised between
the two nations. Starting from 1980s, trade balance has been slanting in favor of China (Chen,
2014). Concerns of Americans are due to such trade deficit, together with China’s inappropriate
policies against intellectual properties rights (IPR) protection, instinctive creativity and WTO
commissions. On the other hand, China also criticizes the U.S. for irrational trade dispute and
exports limitation on advanced – technology products. Notwithstanding, the tension was more
likely to be kept harmoniously and the two countries concentrates more on constructive
progression. The dispute has become real actions ever since Donald Trump was elected to be the
President (Chunding Li, Chuantian He, Chuangwei Lin, 2018). China and the U.S. take turn to
execute measures to cause difficulties for each other to do business not only to themselves but to
the other parts of the world.
Remarkble effects can happen negatively to the economies of the warring parties. The
consequences may simultaneously affect third parties, more directly to nations that link
economically to China and the U.S. (Calì, 2018).
Since a very long time, Viet Nam has tight bounds with both the U.S. and China. They are one of
the biggest business partners of Viet Nam in commercial transactions.
By 2011, trade volume between Viet Nam and China had been $25 billion USD (Xinhua, 2011).
China is predicted to be Viet Nam’s leading trading partner, outstripping the United States by 2030.
In 2017, total exports from Viet Nam to the U.S. was $41,549,715,000 USD, Vietnam ranked 12th
on the ranking of countries supplying the United States, accounting for 2.0% of imports into the

United States.
Therefore, being in the same situation of the world, Viet Nam is also suffering from the U.S. –
China trade dispute. Whether exports from Vietnam have changed, positive or negative, when trade
tensions between China and the U.S. have not signaled to stop? This scheme focuses on analyzing
the impact that Vietnam is facing, specifically on exports to the United States. Before the trade
tensions between the United States and China, exports from Vietnam to the U.S. have made great
strides, but still faced many barriers that the United States introduced, particularly in the case of

2


catfish. So in the context of trade tensions, how the positive trends and limitations of Vietnam's
exports to the U.S. develop?
To evaluate Viet Nam's export performance to the US, only tariff policies between the U.S. and
China are considered, which means impact on non-tariff policies like economic or political are
temporarily ignored. The first direct tariff policy subjected to Chinese good was in the first quarter
of 2018. Therefore, the given milestones are before and after 2018. By comparing Viet Nam’s
export pattern to the U.S. between 2 periods, which are before and after 2018, the scheme provides
datas and comments of author to the reality, difficulties and challenges of exports from Viet Nam
to the U.S.
The chapters are organized as following mentions. Firstly, the scheme will review the U.S. – China
trade tension from 2017. Looking further at the relationship between Vietnam and the United
States, the scheme will provide some evidence as a result of previous studies. Export characteristics
between the two countries before and after the trade war; anh whether the changes in export pattern
from Vietnam to the US are due to the impact of the US-China trade war or not are presented..
Finally, comments are made to assess opportunities as well as challenges arised from such situation.

3

CHAPTER 2.

CONTEXT OF THE U.S. – CHINA TRADE DISPUTE

2.1. Main reasons
The main reasons why the U.S. sparked the dispute are: (a) such large trade surplus from China
threatened employment for Americans; (b) the preoccupation that China imposed unreasonable
policies on the U.S. firms to reveal their technological know-how, which violated the protection of
intellectual property rights; (c) the concern that the U.S. national security and global position were
impaired by China.
2.1.1. The U.S. trade deficit with China
China and the U.S. have enlarged their trade relations over the past decades. Besides that, onesided balance of this trade has been witnessed and concerned by Americans. The widely indicated
reason for the imbalance is the undervaluation of the Renmibi (RMB)1, which has been fixed
against the US dollar, giving the undeserved benefit for Chinese producers (Nicholaas Groenewold,
Lei He, 2007). In 2014, business and federal offices in the U.S. accused China of undervaluing the
RMB and controlling markets to encourage exports. Actions to regenerate the U.S.’s annual
increasing trade deficic with China were demanded by many U.S. politicians, the deficit value was
at $250 billion (David D.Hale, Lyric Hughes Hale, 2014). The People’s Bank of China (PboC)
claimed to belittle the RMB by closely 4% in August 2015, which was known as the first time in
nearly 2 decades of soaring. China has risen to be the world’s second biggest economy and its
currency, known as the Yuan (CNY – Chinese Yuan Renminbi), has been gradually advanced in
price for the past decade. The Yuan is not exactly verified by the market law of supply and demand
but directed by the Chinese government. Paying no attention to such everyday market adjustment,
a reference ratio is set every morning (Graceffo, 2015).
However, on Tuesday, August 11th 2015, the government of China suddenly claimed to depreciate
the Yuan to 2% by the end of the day, which was the most significant devaluation of RMB since
China applied the up-to-date exchange rate approach in 2014. Following the previous day, the
depreciation persisted for the next 2 days, which were August 12th and August 13 th, and leaded to
4.4% drop in total for 3 days (Neil Gough, Keith Bradsher, 2015). The Chinese government
permitted their national currency to fluctuate around the fixing percentage with the amplitude of

1

Renmibi, abbreviated as RMB and coded as CNY, is the official currency of People’s Republic of China

4


2% (2015). The RMB is tightly fixed to the US Dollar since Chinese adjust the exchange ratio
based on the US Dollar. The Yuan defintely rises when the US Dollar goes up against other money
(Wei, 2015). The PboC has gradually let the RMB to fluctuate more for the past years (2015). The
government’s statement to allow more market influences on the Yuan value was made after the
August revaluations, which would let the Yuan to fluctuate more briskly (Wei, 2015). Speculations
on the PboC decision in August and long-term influence were various. One could be reported was
that the RMB had been overestimated for periods and urged to be adjusted reasonably, which was
not to blame the government (Inman, Phillip, Martin Farrer, Fergus Ryan, 2015). Another argument
for the situation was either evidence of the economy’s uncertainty or incapacity of the leaders to
manage it, others assessed the move as a spectacular factor that the government was able to shift
the whole econnomy to be market determined (Smith, 2015). Pattern of a lumping economy was
also another theory for such currency devaluation by the Chinese government. Consumption as
well as exports of China seemed to slowdown for the past periods (Mullaney, 2015). In July 2015,
exports dropped by 8% and plant production fell as 6.6% short as expected intension (2015).
Together with a downturn in the general economy, Chinese stocks have decreased fundamentally
throughout the most recent a while, with the Shanghai record dropping 32% of its worth (Inman,
Phillip, Martin Farrer, Fergus Ryan, 2015). These numbers urged the government to take actions
in order to steady the economy and a currency adjustment was one such action. Products priced in
US Dollar were made more expensive under the impact of the Yuan devaluation, which could lead
to demand reduction of US commodities. Analysts were afraid that the RMB adjustment might be
motivations for deflation in other economies. The term “currency war” were reported to describe
the situation when other countries adjusted their own currency to avoid as well as fight back the

Yuan devaluation. In the meantime, other producers might decrease their prices for international
sale, which easily made Chinese to devaluate the Yuan even lower and caused deflation. The US
Dollar has recently increased against the other currencies. The decrease in RMB would onward
intensify the situation (Makinen, Julie, Samantha Masunaga, 2015). Therefore, arguments are
enough to claim that the Yuan adjustment affects strongly on the U.S. (Hu, 2015).

5


Annual U.S. Trade Deficit With China
600
440.4

425.6

468.4

483.2

462.5

505.6

539.5

400
200

110.5

121.7

123.7

115.8

129.9

115.5

120.3

0
2012

2013

2014

2015

2016

2017

2018

-200
-400

-315.1

-318.7

-600

-344.7

-367.4

-347

-375.7

-419.2

All figures are in billions of US$
Export

Import

Balance

Chart 1. Annual U.S. trade deficit with China2
As Chinese goods imported from the US remained unchanged over the years, the data on exports
from China increased steadily year by year, leading to a more serious trade imbalance. The data
collected for 2018 - the year that trade measures took effect, even reached the highest figure since
2012.
2.1.2. Intellectual properties rights violation
In mid-August 2017, Trump asked U.S. Trade Representative Robert Lighthizer to investigate

China's ability to investigate China's laws, policies, and practices that could harm intellectual
property rights or public development of American technology.
Previous presidential administrations often fulfilled China's demands for technology transfer in
exchange for access to markets, which raised criticism and requestion for a more aggressive
response from Washington.
On November 20th 2018, the United States issued a statement accusing China of continuing
infringement on intellectual property and technology even when the world's two largest economies
were in a tariff war. The new allegations were made in a 53-page detailed report published by U.S.
Trade Representative Robert Lighthizer just 10 days before President Donald Trump is scheduled

2

Data from United States Census Bureau

6


to meet with Chinese President Xi Jinping on the sidelines. G20 Summit in Buenos Aires
November 30th - December 1st.
The U.S. has presented its criticism on piracy and counterfeiting activities in China over a long
time. The USTR3 has listed China on its Priority Watch List for not issuing an enough appropriate
IPRs preservation (2005, 2006, 2007, 2008).
Being inefficient to solve the criticism, the U.S. government requested WTO to investigate China
in April 2007 with the documents of DS362 - China – Measures Affecting the Protection and
Enforcement of Intellectual Property Rights.
WTO DS3624 - China – Measures Affecting the Protection and Enforcement of
Intellectual Property Rights. – by The U.S. (2009)
First claim: Copy right law
As claimed by the U.S., Article 4 in China’s Coyright Law disclaimed preservation
to projects that had been prohibited for communication to public, which was against

Article 9.1 – TRIPS5.
Second claim: Customs measures
China’s Customs Laws allowed customs department to dispose optionally IPviolating commodities extracted at the border and not to depredate them, which was
not relevant to Article 46 and 59 of TRIPS.
Third claim: Criminal thresholds
Commodious thresholds of Chinese violators to operate their business were reported
to infringe Article 61 of TRIPS.

In response to the United States, China has justified fiercely on its position not to violate the TRIPS
Agreement. In January 2009, defects in IPRs protection were found to be inconsistent with TRIPS
by the WTO commitee. According to the WTO council, China's legal to not protect copyright for
works that do not meet TRIPS Agreement is a violation. Furthermore, it is unacceptable that

3

USTR – the United States Trade Representative

Panel Report, China-Measures Affecting the Protection and Enforcement of Intellectual Property Rights, WT/DS362/R (Jan.
26, 2009), available at />4

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal
agreement between all the member nations of the World Trade Organization (WTO)
5

7


counterfeit can be sold publicly at auction in China by merely erasing the violating trademarks as
the only condition. Nonetheless, the council found inadequate provements to conclude that China
violated the TRIPS Agreement as the third claim of Americans. Both sides accepted the outcome

of the investigation and China gave its promise to execute the recommendations in March 2010
(2009).
Concerns about China's regulations on intellectual property (IP), technology and innovation
resulted in the Section 301 Investigation launched by Trump. On March 22nd 2018, Donald Trump
initialed the paper of Memorandum on Actions by the United States Related to the Section 301
Investigation, which accused China of:
− Using regulations in joint venture, overseas investments and licensing procedures to urge
U.S. firms to reveal their technology know-how;
− Maintaining inequitable forces to prevent Americans from getting profits for their IP;
− Facilitating businesses that capture large-scale of technology and IP to assist China’s policy
of “Made in China 2025”;
− Conducting cyber intervention to U.S. network to get valuable information.
2.1.3. Threatens to global position
China has ambition to be the leading nation in technology. In 2011, the Chinese State Council first
discussed about Made in China 2025 (MIC 2025) project and adopted the whole plan two years
later.
MIC 2025 is a 10-year plan, inclusive framework purposed at transforming China to a world
leading advanced manufacturer. As introduced by the Chinese State Council and reported by Scott
Kennedy6, the project includes clear principals, goals, tools and sector focus. MIC 2025 were made
to transform China’s production to be innovation-driven, to stress quality over quantity, to gain
environmental-friendly progress, to optimize the economic design and to foster human resources.
The program identifies the objective of increasing local content of main elements and substances
to 40% by 2020 and 70% by 2025 to achieve the goal of capturing the highest components of global
manufacturing chains. The importance of State is pressed by issuing the total project structure,
deploying financial instruments and supporting creative manufacturing centers. However, MIC
2025 emphasizes the market – driven factors and healthy business environment by relying on

6

Senior Adviser and Trustee Chair in Chinese Business and Economics

8


market establishments, reinforcing intellectual properties rights protection and permitting firms to
generate their own technology standards (Kennedy, 2015).
In 2017, the United States Chamber of Commerce released the report Made in China 2025: Global
ambitions built on local protections7, reflecting on China’s execution of the Made in China 2025
(MIC 2025) project.
This project aims at 10 industries that the U.S. Chamber of Commerce evaluated as unfavorable to
global economic competitiveness. Being contraditory to the annouced measures to execute MIC
2025, Chinese government seems to overprotect the projected sectors from foreign competition and
violate basic IPR protection. Particularly, the report listed four facts to clarify the criticism:
− Market access: Chinese governments have been issuing foreign equity restrictions and
unreasonable request for joint – ventures, requiring technology know-how to be transfered
to become Chinese firms partners.
− Licensing: China’s licensing procedures might be substantial, lumbering and inequitable. In
telecommunications industry, precondition licenses are required for firms operating in basic
or value – added services, which is inessential as WTO agreements. Moreover, the
government has equipped such licenses for 29,000 local firms but only 41 foreign firms
since 2013.
− Laws, Regulations and Standards: Some issued regulations are reported to limit foreign
firms to access to China’s market like the National Security Law, The Cyber Security Law,
The National Cyber Security Strategy, etc.
− Procurement and Bidding: The State involved deepply in some industries via state – owned
firms to prevent foreign firms from procurements. Examples in medical devices and electric
batteries industries were given as evidences.
It can be inferred that the U.S. is being pessimistic about the project Made in China 2025. Parts of
the concern are related to the problem of American firms being appropriated their technical knowhow, which can threaten the position of the U.S. on global scale.
2.2. Retaliations from both sides – tariff measures

Because of the reasons stated earlier, the US government has directly implemented policies to start
a trade war between the two countries. In this situation, China immediately implemented other

7

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9


policies to respond to unfair trade measures that the US government took. The two sides have
consistently made allegations as well as tariff and non-tariff trade measures to combat and punish
each other.
One of the bases for Donald Trump's government to take commercial measures to punish China is
Section 301. Sections 301 through 310 of the Commercial Act of 1974, are often known as Section
301, which is known as one of the pricipal regulated actions that the U.S. executes their rights
under unfair treaties to the U.S. exports. After 2010, USTR has brought all trade sanctions with
WTO members directly to the council for investigation. The Trump administration utilizes Section
301 as previous U.S. practices. Foreign acts and policies that were under the investigation of USTR,
concluded as: (1) being incompatible with a trade agreement or (2) being immoderate and violated
to the U.S. commerce. Course of actions are projected execution following a timetable which
determines when to address such measures (M.Morrison, 2019).
After the initial of a Section 301 inspection, USTR is in quest for negotiated agreement with the
involved nations. If the concerned countries are involved in one organization or trade agreement
such as the Uruguay Round or WTO, the specific regulated sanction procedures are required. The
USTR has a period of 12-18 months to reach a negotiated agreement under Section 301. If not,
determinations to retaliate at a relative level to the calculated loss are made by the USTR
(M.Morrison, 2019).
Under the impact and policies introduced from section 301 investigation, China also responded,
which both included tariff or non-tariff measures.
The real deficit begins when on January 22nd 2018, the U.S. announced to apply tariffs on solar

panels and washing machines imported into the U.S. China was one of the countries most affected
by this policy. According to statista.com, China accounts for 8% of the countries acting as US solar
panels suppliers. Besides, washing machines are items that the US has imported from China with
a value of $1.1 billion USD in 2015. Not stopping there, the US continues to impose tariffs on steel
and aluminum imported from all other countries. And China is also heavily influenced by this tax
policy. Right after that, series of tax tranches are officially cunducted on the basis of Section 301
and responses from China also emphasized the trade dispute.
Country imposing

Ad Valorem

Stated Imports

tariff

Tariff Rates

Impacted

10

Tariff Actions and Dates


U.S.

Implemented
25%

$34 billion

Tranche 1

6/7/2018

China

Implemented
25%

$34 billion

Tranche 1

6/7/2018

U.S.

Implemented
25%

$16 billion

Tranche 2

23/8/2018

China

Implemented

25%

$16 billion

Tranche 2

23/8/2018

U.S.

10% hike effective 24/9/2018;
10%, then 25%

$200 billion

Tranche 3
China
Tranche 3
(4 lists)

raised to 25% by 10/6/2019
5% and 10%, then
10%, 20% and
25%

$60 billion

5% and 10% hikes on
24/9/2018; increased to 10%,
20%, and 25% on selective

products, effective 1/9/2019

$300 billion

Implemented on Annex A on
1/9/2019; on Annex C on
15/12/2019 (postponed)

U.S.
15%
Tranche 4

Table 1. The U.S. and China tariff measures8
During the entire process from the first round of tariffs to date, the United States has implemented
25% tax on $250 billion USD of goods imported from China (not including Tranche 4 as the
implementation has not been completed). In contrast, on the Chinese side, $110 billion USD of US
goods is taxed between 5% and 25%. The reason for the lower value of the US goods from China
compared with the opposite side comes from one of the reasons leading to this trade war - the issue
of US trade surplus to China. The amount of goods imported from the United States to China is
much less than that of China exported to the United States. In 2018, the import value from the
United States was only nearly $120 billion USD while the export value reached $480 billion USD.

8

Data from USTR and Chinese Ministry of Finance, aggregated partly by (M.Morrison, 2019)

11


CHAPTER 3.

ANALYSING IMPACT OF THE U.S. – CHINA TRADE DISPUTE ON

VIET NAM’S GOOD EXPORTS TO THE U.S.
3.1. Merchandise exports from Viet Nam to the U.S. before 2018
3.1.1. Trade relations
Trade relations between Viet Nam and the U.S. stayed frostbitten from mid-1970s to mid-1990s
partly due to the previous war. Following the predecessor, Mr. President Gerald R.Ford maintained
Nixon’s trade restriction on Vietnam. The tough relation began to ease under the administration of
President Clinton, who put his effort to resolve a condemed problems of recovering the U.S. soldier
personnel which were believed to be missing in Vietnam War (Asian Affairs Specialists, 2018).
On February 3rd 1994, an end to the trade restriction on Viet Nam was put by Clinton. Viet Nam
and the U.S. officially restored relations on July 11th 1995. The primary U.S. ambassador in Viet
Nam was settled two years after (Clinton, 1995).
In 1986, Viet Nam transfered from a central-planned economy to a market-determined socialism.
A projected-plan for 30 years was made for the hasty growth of the whole economy after a
frozenstiff stage. Since then, Viet Nam’s real GDP has been about 6% on average every year. On
July 13th 2000, a bilateral trade agreement (BTA) was signed, which enabled Viet Nam to enjoy
the conditional most favoured nation (MFN) status.
A Trade and Investment Framework Agreement (TIFA) established in June 2007 as well as a
Council to confer about applying agreements of TIFA, WTO and general regulations between Viet
Nam and the U.S. Since then, Viet Nam has been striving to narrow the relation gaps. The U.S.
government accepted Viet Nam to join in the Generalized System of Preferences, which
encouraged Viet Nam to participate more in commerce between the two nations.

12


Growth in merchant trade between Viet Nam and the U.S.
from 2001 to 2017

US Dollar Thousand
45000000
40000000
35000000
30000000
25000000
20000000
15000000
10000000
5000000
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Viet Nam imports from the U.S.

Viet nam exports to the U.S.

Trade balance

Chart 2. Growth in merchant trade between Viet Nam and the U.S. from 2001 to 2017 9
As can be seen from the chart, trade flows between the United States and Vietnam grew quickly
from 2001 to 2017.
Year-over-year growth of imports appears to be more even than exports with an average fluctuation
margin of $556,350,000 USD. Meanwhile, the export value has always sharply increased over the
years, with the average fluctuating amplitude of $2,530,251,380 USD.
Taking a closer look at exports from Vietnam to the U.S. in 2017, with a total export value of
$41,549,715,000 USD, Vietnam ranked 12th on the ranking of countries supplying the United
States, accounting for 2.0% of imports into the United States. It can be said that, although only
building trade relations at the end of the twentieth century, over 20 years, the trade relationship
between Vietnam and the United States has had many positive changes (Asian Affairs Specialists,

2018).

9

Data from TradeMap, trade balance is calculated by author

13


3.1.2. Merchandise export structure

GOODS EXPORTED STRUCTURE FROM VIET NAM TO
THE U.S. IN 2017
Articles of leather
2%

The rest
18%

Electrical machinery
and equipment
23%

Edible fruit and nuts
3%
Machinery,
mechanical
appliances
7%

Apparels, knitted or
crocheted
15%

Furniture
10%
Apparels, not knitted or
crocheted
10%

Footwear
12%

Chart 3. Goods exported structure from Viet Nam to the U.S. in 2017 10
Playing a leading role in Vietnam's exports to the United States, the Electronics and Technology
group led the list with $10,934,265,795 USD export value, far exceeding the second position in the
list.
According to USITC, Vietnam's electrical machinery exports to the United States have grown
significantly since 2001, from less than $1 million USD to just under $1 billion USD in 2011 and
then increasing to more than $8.3 billion USD in 2015 and almost $11 billion USD in 2017.
Electrical machinery constituted more than 23% of total US imports from Vietnam in 2017.
According to interviews with foreign investors in Vietnam, there is great potential for growth in
this sector because of Vietnam’s relatively inexpensive, skilled workers. Vietnamese economic
officials have indicated that expanding the production of higher-valued consumer electronics and
other electrical devices is a priority for the nation’s transition to a middle-income economy.
While most of the focus of bilateral trade discussions has been on the sizeable clothing imports
from Vietnam, footwear constituted nearly 12% of total U.S. imports from Vietnam in 2017.
Vietnam was the second-largest source of footwear imports for the United States in 2017 (after
China), more than three times the size of imports from Indonesia (the next largest source).

10

Data from TradeMap

14


Since 2004, Vietnam has risen from being the 62nd largest source for furniture and bedding imports
for the United States to being the 4 th largest source — surpassing past leaders such as Italy,
Malaysia, and Taiwan. Furniture and bedding accounted for 10% of total U.S. imports from
Vietnam in 2017.
3.1.3. Notices for Vietnamese exporters before 2018
Criticism by the U.S. on Viet Nam’s IPR protection remains. Viet Nam is also listed in the U.S.
Trade Representative’s 2017 Special 301 Report. The presence of Viet Nam in the list was
explained by the unsolved problem of cyber piracy and counterfeit goods sales.
Vietnamese commodities face anti-dumping policies imposed by the US government with specific
groups of goods, notably the case of catfish. This creates many disadvantages for Vietnamese goods
in the US market, when the price is too high compared to the market price.
Since 2003, the U.S. has subjected anti-dumping measures on Vietnamese catfish. Before such
measures, catfish from Viet Nam was common in Americans for its quality, favor and moderate
price, which resulted in the quantity increase of Vietnamese frozen catfish fillets imported to the
United States, from 54.5 tons (1997) to 7,765 tons (2001). The pattern peaked in 2013, at the
number of 101,726 tons.
Nonetheless, catfish is also important to Southern Americans i.e. Arkansas, Mississippi, Louisiana
and Alabama. The CFA11 was concious of the situation of rising competition from Vietnamese
catfish, which was reported as unfair and menacing to their industry. Actions were made and the
CFA urged the government to cut down on catfish imported from Viet Nam.
Initially, a projected advertisement was spread to slander Vietnamese catfish hygienic background.
Moreover, the CFA claimed that Vietnamese words used to identify catfish were not appropriate
and additionally added that catfish can only be raised in the regions of Southern States of the U.S. 12

The U.S. Department of Commerce responded to the dumping complaints of the CFA and imposed
anti-dumping tariffs from 37 – 64% on Vietnamese catfish in 2003. Such anti-dumping tariff on
Vietnamese catfish remains effective to date through 13 reviews by Administrations (Phu).
In response to the U.S. regulations on Vietnamese catfish, Viet Nam’s Ministry of Foreign Affairs
presented dissatisfaction and commented that the measures were unessential and harmful to
11
12

CFA - the Association of catfish Farmers of America
Section 755 and 10806 of the U.S. 2002 Farm Bill

15


national exports and income of Vietnamese farmers. Such unfair policy was also stated to violate
the WTO sanitary and phytosanitary agreements (SPS). A complaint was filed to WTO by Viet
Nam, saying that the U.S. regulations on Vietnamese catfish infringed the WTO – SPS agreement.
The document pointed out that Americans executed protection measures without any scientific
fundamentations (Asian Affairs Specialists, 2018).
It can be said that while the Vietnamese government is responding to the US anti-dumping policy,
the time and money invested in lawsuits is not small. And the fact that U.S. policy is still valid, the
losses that Vietnamese exporters have been suffering are enormous.
3.2. Merchandise exports after 2018
3.2.1. Why the U.S. – China trade dispute relates to Viet Nam?
The impact on tariffs measures reduces the volume of exports from China to the United
States.
Under the effects of US tariff measures applied directly to Chinese goods exported to the US, the
trade relationship between the two countries is witnessing many changes in a negative, specific
direction especially in commodity trading.

The U.S. imports value from China before and after the
trade dispute initiation
Millions of US Dollars
140,000
135,000

136,986

136,135
133,349

130,000
125,000

135,604

131,706

125,545 126,528

120,000
120,616
115,000

117,415 117,602

110,000

105,000
2017 (I) 2017 (II) 2017 (III) 2017 (IV) 2018 (I) 2018 (II) 2018 (III) 2018 (IV) 2019 (I) 2019 (II)

The U.S. imports value from China

Chart 4. The U.S. imports value from China before and after the trade dispute initiation 13

13

Data from the U.S. Bureau of Economic Analysis

16


Taking the point since the US announced the first round of taxation under the framework of Section
301 Investigation in early 2018, the volume of Chinese goods exported to the US immediately
fluctuated. Between the second and third quarters of 2018, trading volume plummeted from
$136,135 millions USD to only $131,706 millions USD. From 2018 to 2019, the downtrend is even
stronger as the value in the first quarter of 2019 is approximately the same as the value in the first
quarter of 2014.
According to a 2018 study, by combining HS-8 digit US import data for 2017 from the US Census
Bureau of Statistics, HS-6 digit product-level price elasticity of US imports (estimated by Kee et
al. 2008) and the published list of Chinese products subject to the three tranches of US tariffs,
Massimiliano Calì predicted the downtrend in commodity groups, namely:
− Electronic Machinery and Equipment;

− Articles of Base Metal;

− Machinery, Boilers and Mechanical

− Optical and Precision instruments;
− Paper and Articles thereof;

appliances;
− Furniture;

− Organic Chemicals;

− Vehicles other than Railway;

− Glass and Glassware;

− Articles of Iron of Steel;

− Tools of Metal;

− Plastics and Articles;

− Fish and Crustaceans;

− Articles of Leather;

− Others.

− Wood and Articles;
Parts of the listed products are also items that Vietnam provides to the United States.
The upside of the decrease in U.S. imports from China is the possible rerouting of Americans
to non-Chinese suppliers, of which East Asia nations can be potential candidates since
resemblances in exports structure to the U.S. are presented (Calì, 2018).
With article of (Olivier Cadot, Leonardo Iacovone, Denisse Pierola, Ferdinand Rauch, 2011),
which provided evidence to such intuition – nations would be more probable to replace each other
to supply one market if their export amount to that market is significant enough, Massimiliano Calì
in 2018 evaluated the U.S. looking for other East Asian countries to replace China to supply the

country. He identified products at the HS-8 digit level, which are subjected to be taxed at higher
tariffs in the U.S. market, happen to be also exported to the U.S. by other East Asian countries for
a value of at least $10 million USD in 2017. The reason for a threshold of $10 million USD was

17


given that supplying under this amount makes a country a marginal supplier to the United States,
which means less opportunities for such nations to be a replacement.
Results from this study show that Vietnam has the highest potential to replace Chinese exports to
the U.S. in the group of 10 countries in East Asia (Vietnam, the Philippines, Cambodia, Taiwan,
Singapore, Malaysia, Thailand, Korea, Indonesia and Myanmar). The estimated decrease in the
U.S. imports from China in products that Viet Nam also supplies for at least 10 millions is about
10.9% of Viet Nam’s GDP. Products that are expected to have more opportunites are those both
estimated China exports drop and existing Viet Nam exports are large such as shrimp and prawns,
furniture, travel bags, parts of seats, electrical machinery,…
3.2.2. Changes in merchandise exports structure
When the tariff measures directly applied to Chinese goods actually take effect, the prices of
Chinese goods in the US market become more expensive and gradually the volume of trade in
goods between China and the US will decrease. With research from 2018, Vietnam plays a role as
a new destination for US importers.
With real trade data, exports from Vietnam to the US have been really increasing and stronger
fluctuations are witnessed in the commodity group that is expected to reduce imports from China.

2


VIET NAM EXPORT STRUCTURE TO THE U.S.
IN 2018 AND 2019 (YEAR -TO-DATE VALUE)

Rest

10,685,492,965

12,581,515,128

Non-knitted and NonCrocheted Clothing (62)

4,469,611,150

Furniture (94)

4,939,755,182

3,873,893,158

5,289,701,046

3,631,858,010

5,823,173,409

4,649,571,614

Foowear (64)
Knitted or Crocheted
Clothing (61)
Electrical Machinery (85)

5,306,059,816

15,914,636,947
8,204,240,333
YTD 2018 ( JAN - SEP )

YTD 2019 ( JAN - SEP )

Chart 5. Viet Nam export structure to the U.S. in 2018 and 2019 (year-to-date value) in US
Dollar14
Considering the same period from January to September of 2018 and 2019 (statistics for October
and November 2019 are not currently available), Electrical Machinery increased export value
significantly with nearly 94%, this is also a Chinese product that is said to be most affected by the
US tariff. Similarly, Furniture also has the same trend, not only in the trade relationship between
China and the U.S. but also between Vietnam and the U.S., the export value increased from over
$3 billion USD to nearly $5 billion USD for the same period.
Not stopping at products with a large export share in terms of value, this scheme continues to look
more closely at items with large growth.

Merchant

HS

YTD 2018

Code

(Jan – Sep)

(Jan – Sep)

57

48,477

17,439,845

35,976%

31

56,700

1,063,776

1,876%

Carpets, Other Textile Floor
Coverings
Fertilizers

14

YTD 2019
Growth

Data from the U.S. Bureau of Economic Analysis

3


Silk

50

863

3,233

375%

Chemical Products N.E.C.

38

6,483,641

19,929,738

307%

05

5,626,217

16,725,756

297%

41

408,677

1,121,261

274%

81

3,493,805

9,364,840

268%

35

909,828

2,403,988

264%

26

11,223

28,321

252%

56

8,582,642

20,394,540

238%

02

2,175,755

4,785,915

220%

Animal Originated Products;
Not Elsewhere Specified Or
Included
Raw Hides And Skins (Other
Than Furskins) And Leather
Metals; N.E.C., Cermets And
Articles Thereof
Albuminoidal Substances;
Modified Starches; Glues;
Enzymes
Ores, Slag And Ash
Wadding, Felt And
Nonwovens, Special Yarns;
Twine, Cordage, Ropes And
Cables And Articles Thereof

Meat And Edible Meat Offal
Electrical Machinery And
Equipment And Parts
Thereof; Sound Recorders
And Reproducers; Television

85

8,204,240,333 15,914,636,947

194%

Image And Sound Recorders
And Reproducers, Parts And
Accessories Of Such Articles
Complete Industrial Plant

98

68,858,053

129,585,910

188%

Fabrics; Knitted Or Crocheted

60

3,182,772

5,855,937

184%

4


Stone, Plaster, Cement,
Asbestos, Mica Or Similar

68

87,358,795

157,782,910

181%

39

316,968,236

559,978,396

177%

06

916,505

1,580,068

172%

48

119,056,600

199,590,454

168%

01

849,831

1,398,039

165%

44

197,155,838

312,685,835

159%

90

370,767,601

586,934,613

158%

73

353,240,495

541,584,180

153%

95

488,222,307

737,997,114

151%

Materials; Articles Thereof
Plastics And Articles Thereof
Trees And Other Plants, Live;
Bulbs, Roots And The Like;
Cut Flowers And Ornamental
Foliage
Paper And Paperboard;

Articles Of Paper Pulp, Of
Paper Or Paperboard
Live Animals
Wood And Articles Of Wood;
Wood Charcoal
Optical, Photographic,
Cinematographic, Measuring,
Checking, Medical Or
Surgical Instruments And
Apparatus; Parts And
Accessories
Iron Or Steel Articles
Toys, Games And Sports
Requisites; Parts And
Accessories Thereof
Table 2. Growth ranking of merchandise exported from Viet Nam to the U.S. in Thousand US
Dollars15

15

Data from USITC, growth is calculated and sorted by author

5


Some notable details can be named as:
− Electrical Machinery - 85 is not only highly exportable but also highly valued for growth;
− Some related products with large value groups also appear in the ranking of growth rates
such as Carpets, Other Textile Floor Coverings - 57 (related to Furniture) leads the growth
with numbers astonishing 35,976%, Knitted Or Crocheted Fabrics - 60 (related to Knitted

Or Crocheted Clothing) with a growth of 184%, ...;
− Iron Or Steel Articles - 73 is a remarkable item in this ranking. Before applying direct tax
rounds on Chinese goods, the United States also imposed high taxes on this type of goods
for all US supplier countries. Although not specified by name, China is considered the US
target in this move. Vietnam, of course, is an American supplier of this product and certainly
faces many difficulties when subject to high taxes. However, this is still a product with high
export growth in Vietnam's export structure to the US.

3.2.3. Issues arised under the impact of the trade dispute
It is obvious that Vietnam is enjoying a boom in the export of goods, especially exports to the US,
with actual indicators showing a positive trend. However, in the long run, Vietnamese exporters
face many of the challenges brought by the U.S. – China trade dispute. In the report How will
Vietnam Cope with the Impact of the US-China Trade War? in 2018, the authors discussed the
negative effects from the trade war between the two powers to Vietnam. These effects can be seen
as challenges for Vietnamese exporters.
Chinese routed their goods to Viet Nam before exporting to the U.S., which could lead to high
tariff taxed on Viet Nam’s exporting goods to the U.S.
Chinese facturers obviously do not want to suffer such high tariff from the U.S. Utilizing situation
that Viet Nam is being favored by Americans, Chinese-made commodities are rerouted to Viet
Nam and labelled as “made-in-Vietnam” to deliver to the U.S. without being taxed as subjected.
In a press conference to announce the socio-economic statistics of the General Statistics Office on
September 28th, 2018, Mr. Nguyen Bich Lam, General Director of the Statistics Department,
emphasized the risks of the US assessing Vietnam as trade fraud, because a lot of Chinese goods
enter Vietnam and hide under Vietnamese brands to export to the U.S.
For example, cheap Chinese steel is being labelled “made-in-Vietnam” and exported to the U.S.,
which disturbs Mr. Do Duy Thai – Chairman of Viet Steel Corporation (Anh, 2018). The same
6