Group Assignment

Spring 2023
ECO201 | IB1702

Group 4
Lecturer: Nguyen Hai Tuan
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ECO201 – International Economics

Group 4

Name Code Email

Tran Thanh Tu CS171645 [email protected]

Nguyen Phuong Thy CS171290 [email protected]

[email protected]
Vu Ngoc Mai Anh CS170992
n
Nguyen Minh Khoi CS170541 [email protected]

The effects of the US-China trade war. Which countries will benefit and which
countries will be affected. Please contact the case of Vietnam?

Table of contents
I. Introduction.................................................................................................................................0
Topic
II. Effects of the US-China trade war in the global economy........................................................0
III. Countries that will benefit from the trade war......................................................................2
1. Taiwan.................................................................................................................................................2
2. Mexico..................................................................................................................................................3
3. India.....................................................................................................................................................4
IV. Countries that will be affected by the trade war...................................................................5
1. Canada.................................................................................................................................................5
2. Mexico..................................................................................................................................................6
3. Japan....................................................................................................................................................6
4. Germany..............................................................................................................................................7
5. Australia..............................................................................................................................................7
V. The case of Vietnam.................................................................................................................7
1. Positive effects of the trade war on Vietnam...................................................................................8
2. Negative effects of the trade war on Vietnam.................................................................................9
3. Measures taken by Vietnam to mitigate the negative effects of the trade war..........................11
VI. Conclusion..............................................................................................................................12
VII. References...............................................................................................................................12

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1. Introduction
The US-China trade war has been one of the most significant economic conflicts in recent
history. The US-China trade war was a series of escalating tariffs and trade barriers imposed
by the United States and China on each other’s goods starting in 2018. It was sparked by US
allegations that China had engaged in unfair trade practice, including intellectual property
theft and forced technology transfers. In response, the US imposed tariffs on a wide range of
Chinese goods, and China retaliated with tariffs of its own on US goods. The trade war had a
significant impact on both countries, with billions of dollars’ worth of goods affected.
However, its effects were not limited to the US and China. The trade war had ripple effects
throughout the global economy, impacting other countries that were closely linked to the two
superpowers through trade and investment.
The purpose of this paper is to analyze the effects of the US-China trade war on the global
economy and to identify which countries are likely to benefit and which are likely to be
negatively affected. Specifically, this paper will examine the impact of the trade war on
Vietnam, a country that has emerged as a potential winner in the trade dispute.

2. Effects of the US-China trade war in the global economy

Global Economic Slowdown
The trade war between the US and China has indeed had a significant impact on the global
economy, leading to a slowdown in growth and causing uncertainty and volatility in financial
markets. The implementation of tariffs and counter-tariffs has resulted in decreased
international trade and investment, disrupting supply chains and affecting businesses and
consumers worldwide.
As two of the world's largest economies, the US and China have a significant impact on the
global economy. The imposition of tariffs on each other's goods has led to higher prices for
consumers and businesses, reducing demand for those products and ultimately affecting the
sales and profitability of businesses involved in international trade.
Furthermore, the trade war has created uncertainty and volatility in financial markets, leading
to increased risk aversion among investors and a decrease in global investment flows. This, in
turn, has had a negative impact on emerging market economies, which are heavily reliant on
foreign investment to finance their development and growth.
Supply Chain Disruptions
The trade war between the United States and China has caused disruptions in global supply
chains. The implementation of tariffs and trade restrictions has made it more difficult and
expensive for businesses to trade with China, leading many companies to seek alternative
suppliers in other countries. This has disrupted the flow of goods and services and increased
costs for businesses, as they have had to invest in new supply chains and logistics networks.
These increased costs are often passed on to consumers in the form of higher prices, leading
to inflation. In addition, the uncertainty surrounding trade relations between the United States
and China has made it difficult for businesses to plan for the future, leading to further
disruptions in supply chains and increased costs. Ultimately, these disruptions can have a
negative impact on the global economy, as businesses struggle to adapt to the new trade
environment and consumers face higher prices for goods and services.
Geopolitical Tension
The trade war between the US and China has indeed increased tensions between the two
countries and has resulted in a more competitive geopolitical landscape. The two countries
are engaged in a range of disputes, including trade, technology, intellectual property, and
territorial claims in the South China Sea.

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As a result, there has been a shift in alliances and partnerships. The US has sought to
strengthen its relationships with its traditional allies in the Asia-Pacific region, such as Japan,
South Korea, and Australia, and has also sought to forge new partnerships with countries
such as India. China, on the other hand, has sought to strengthen its relationships with other
countries in Asia, Africa, and Latin America through its Belt and Road Initiative. This has led
to concerns in some countries about China's growing influence and its potential to create a
new sphere of influence.
The impact of these geopolitical tensions is being felt around the world. The trade war has
disrupted global trade flows and has caused uncertainty for businesses and investors. It has
also led to a rethinking of supply chains, with some companies moving production out of
China to avoid tariffs and mitigate risks.
Reduced Trade Opportunities
The trade war between the US and China has indeed had a significant impact on global trade
and economic growth. Both countries have implemented tariffs and other trade barriers,
which have reduced the volume of imports and exports between them.
As a result, many other countries that rely on trade with the US and China have seen a
decline in their economic growth. For example, countries that export raw materials, such as
oil, metals, and agricultural products, have seen a reduction in demand from China, which has
led to lower prices and reduced exports.
Similarly, countries that rely on exports to the US have also been impacted by the trade war.
For instance, some countries that export electronic goods, textiles, and automobiles to the US
have faced increased tariffs, making their products less competitive in the US market.
In addition, the uncertainty created by the trade war has led to a reduction in business
investment and consumer confidence, further slowing down economic growth.

3. Countries that will benefit from the trade war

4. Taiwan
Taiwan, a small island nation located off the southeastern coast of China, has emerged as an
unexpected beneficiary of the ongoing trade tensions between the United States and China.
As the world's two largest economies continue to impose tariffs and trade restrictions on each
other, Taiwan's economy has been able to capitalize on new business opportunities and attract
investment from companies looking to diversify their supply chains. Despite its relatively
small size, Taiwan is a significant player in the global economy. With a population of just
over 23 million, it is the world's 21st largest economy and a major producer of high-tech
goods such as semiconductors, electronics, and computer components. These industries are
particularly important to the US-China trade war, as they have been heavily targeted by both
sides in their efforts to gain a technological edge over each other.

As a result of the trade war, many companies have been forced to re-evaluate their supply
chains and look for alternative sources of goods and services. Taiwan's advanced
manufacturing capabilities, skilled workforce, and favorable business environment have
made it an attractive destination for these companies. This has led to a surge in investment
and exports, boosting Taiwan's economic growth and creating new jobs in key industries.
As a result of US tariffs on Chinese goods, many companies have shifted their production to
Taiwan, particularly in the technology and electronics sectors. Taiwanese companies such as
Foxconn and TSMC have increased their investments in the US, leading to increased job
opportunities and economic growth in the country. This increased demand for Taiwanese

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products has further boosted the country's economy. Moreover, the trade war has prompted
many companies to diversify their supply chains away from China, which has benefited
Taiwan. Taiwanese companies have been able to capitalize on this trend by offering
alternative manufacturing and supply chain solutions, leading to further growth in the
country's economy.
The trade war has also led to increased foreign investment in Taiwan, particularly from
companies looking to relocate their production from China to avoid US tariffs. This has led to
a boost in Taiwan's economy and increased job opportunities for Taiwanese workers. The
surge in interest from foreign investors has also led to a further boost in Taiwan's exports. In
addition to these economic benefits, the trade war has also strengthened ties between Taiwan
and the US. The two countries have increased cooperation, particularly in the technology and
defense sectors. The US has also shown support for Taiwan's bid to join international
organizations such as the World Health Organization, further cementing the strong
relationship between the two countries.

In summary, the ongoing trade war between the US and China has had significant impacts on
the global market, with some countries experiencing negative consequences. However,
Taiwan has been able to benefit from the trade war, with increased demand for its products,
diversification of supply chains, increased foreign investment, and strengthened ties with the
US. These economic benefits have led to increased job opportunities and economic growth in
the country, making Taiwan a bright spot in an otherwise uncertain economic climate.

5. Mexico
Mexico, one of the largest economies in Latin America, has been a beneficiary of the ongoing
trade tensions between the United States and China. The trade war has disrupted global trade
patterns and supply chains, leading many businesses to reconsider their manufacturing and
sourcing strategies. Mexico, with its proximity to the United States and competitive labor
costs, has emerged as an attractive alternative for companies seeking to diversify their
operations and reduce their reliance on China. As a result, the Mexican economy has seen an
increase in foreign investment, exports, and job creation, particularly in the manufacturing
sector. This trend is expected to continue as the trade war shows no signs of abating,
presenting Mexico with an opportunity to solidify its position as a key player in the global
economy.

The ongoing trade war between the US and China has had far-reaching impacts on the global
economy. While many countries have been negatively affected by the trade war, Mexico is
one country that has the potential to benefit in many ways. In particular, Mexico can increase
its exports to the US and strengthen its trade ties with the US. The US-China trade war has
made Chinese products more expensive, leading many companies to look for alternative
manufacturing bases. Mexico is already the second-largest exporter to the US, but the trade
war has created new opportunities for Mexican companies. US-based companies such as Ford
and GM have shifted some of their production from China to Mexico to avoid US tariffs,
which has led to an increase in Mexican exports of auto parts and other products to the US.
Moreover, the US-Mexico trading relationship has been further strengthened by the trade
war. Mexico has been able to capitalize on the trade diversion effect caused by the trade war
and has become an important link in US supply chains. For example, Mexico has become a
major producer of electronic components, which are used in many US-made products. The
USMCA, which replaced NAFTA, has also increased the level of integration between the US

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and Mexican economies. This has led to increased cooperation and trade between the two
countries, benefiting both economies.
One of the main benefits that Mexico has gained from the trade war is increased exports to
the United States. With Chinese products becoming more expensive due to US tariffs, many
companies have been looking for alternative manufacturing bases. Mexico, which is already
the second-largest exporter to the US, has been able to capture some of this demand. US-
based companies such as Ford and GM have shifted some of their production from China to
Mexico, leading to an increase in Mexican exports of auto parts and other products to the US.
In addition to increased exports, the trade war has also strengthened trade ties between the US
and Mexico. Mexico has become an important link in US supply chains, and the USMCA has
further increased the level of integration between the two countries. This has made Mexico a
more attractive destination for foreign investment, with companies looking to take advantage
of Mexico's proximity to the US and its free trade agreements with other countries. In
addition, the trade war has also encouraged Mexico to pursue economic reforms and
modernize its economy. This has made the country more competitive in the global market
and has increased its attractiveness to foreign investors. For example, Mexico has introduced
labor reforms that are designed to improve workers' rights and working conditions. This has
helped to make Mexico a more attractive destination for foreign investment and has increased
the competitiveness of its manufacturing sector.

Mexico, like many other countries, has been affected by the ongoing trade war between the
United States and China. However, the country has been able to turn the situation to its
advantage and has emerged as a potential winner in the trade war. Mexico has been able to
capitalize on the shift in the global supply chains caused by the trade war and has become an
attractive destination for foreign investment.

6. India
India, as one of the fastest-growing major economies in the world, has emerged as a key
player in the global market. In recent years, the country has been actively seeking ways to
bolster its economy and reduce its dependence on imports from China. The ongoing trade war
between the United States and China has presented India with a unique opportunity to
capitalize on the situation and enhance its economic position. With the world's two largest
economies imposing tariffs on each other's goods, India can potentially fill the void left in the
global market and benefit from increased demand for its products. This has opened up a
window of opportunity for India to attract foreign investment, boost exports, and emerge as a
major player in the global economy.

The US-China trade war has had several positive impacts on India. Firstly, Indian goods are
in higher demand due to US tariffs on Chinese products. This has led to companies shifting
their production to India, particularly in the manufacturing and agricultural sectors. As a
result, there has been a significant increase in demand for Indian products.

Secondly, the trade war has encouraged companies to diversify their supply chains, which has
benefited India. Indian companies have offered alternative manufacturing and supply chain
solutions to meet the new demand. This has led to an increase in foreign investment in India,
with companies looking to relocate their production from China to avoid US tariffs. This has
created new job opportunities for Indian workers and given a boost to India's economy. In
2018, India increased its exports of agricultural products, including soybeans and rapeseed, to

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China, as a result of China's retaliatory tariffs on US soybeans. This led to increased demand
for Indian agricultural products and a boost in India's agricultural sector.

Lastly, the US and India have strengthened their cooperation in the technology and defense
sectors as a result of the trade war. This has led to increased investment in these areas and has
opened up new opportunities for Indian companies to collaborate with their American
counterparts. In 2019, Apple shifted production of its iPhone SE to India, in response to US
tariffs on Chinese goods. This led to increased demand for Indian-made iPhones and a boost
in India's manufacturing. The US and India have increased their cooperation in the defense
sector, with the US approving several defense deals with India in recent years. This has led to
increased investment in India's defense industry and a boost in the country's defense
capabilities.

The US-China trade war has provided India with a chance to strengthen its position in the
global market and forge closer economic and political ties with the US. However, India needs
to continue to diversify its economy and supply chains to remain competitive in the long run.

7. Countries that will be affected by the trade war

The US-China trade war has global impacts far beyond the borders of these two countries.
Several other countries, both developed and developing, are expected to be affected by this
ongoing economic conflict. This trade war is likely to have a domino effect on the global
economy. For example, tariffs and trade restrictions between the United States and China
could lead to increased prices for products manufactured or sourced in China, which could
affect the supply chain and increase costs for businesses around the world. Additionally, the
trade war is likely to lead to slower global economic growth, which could hurt countries that
rely heavily on exports.

1. Canada
Canada is one of the top trading partners of the US and China. The trade war has led to a
drop in demand for Canadian exports, especially in the agricultural and manufacturing
sectors. For instance, Canadian soybean exports to China, which was Canada’s second-largest
soybean market, have been hit hard. According to a report from Statistics Canada, exports of
canola, soybeans, and wheat to China fell by more than half in 2019, compared to 2018.
These losses have had a significant impact on Canadian farmers and agricultural business.
Additionally, manufacturing industries in Canada that rely on exports to the US and China
have also been negatively affected. For example, the tariffs imposed by the US on Chinese
imports have caused a decrease in demand for Canadian-made products that are shipped to
the US as part of the global supply chain. Furthermore, Canada’s economy is closely linked
with international business supply chains, so any disruptions could have a ripple effect. The
trade war has negatively impacted Canada's trade with the US, its largest trading partner. As
the US and China imposed tariffs on each other's goods, it created a ripple effect on Canada's
exports to the US, particularly on steel and aluminum. In 2018, the US imposed tariffs of
25% on Canadian steel and 10% on Canadian aluminum, which negatively affected Canada's
exports. This has led to a significant increase in the price of steel and aluminum products in
Canada, affecting domestic businesses that rely on these materials. Moreover, the trade war
has also created uncertainty in the business environment, leading to a decline in investment
from both the US and China.

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2. Mexico
Mexico is also heavily dependent on exports to the US and the trade war has reduced demand
for Mexican goods. The country is also affected by the uncertainty surrounding the future of
the North American Free Trade Agreement (NAFTA). By imposing trade mitigation
measures, Mexico could become an important trading partner in alternative business supply
chains. However, this could also create pressure on Mexico to improve its competitiveness
and look for alternative markets. Mexico has also experienced a decline in foreign investment
due to the trade war. The uncertainty surrounding NAFTA and the tensions between the US
and China have caused investors to hold back on making new investments, resulting in a
slowdown in Mexico's economic growth. Furthermore, the US tariffs on Mexican steel and
aluminum have hit the Mexican economy hard, as these industries are significant sources of
revenue for the country. Mexico is taking measures to mitigate the impact of the trade war.
The country is looking to diversify its export markets and has been exploring new trade
agreements with countries such as Japan, South Korea, and the European Union. Mexico has
also been investing in its infrastructure and technology to boost its competitiveness and
attract foreign investment.

3. Japan
Japan is a major exporter of steel and aluminum to the US, and the tariffs imposed by the US
have hurt Japanese companies in these industries. The country has also been affected by the
impact of the trade war on global economic growth. Japan has a strong and diversified
economy with many major industries that make an important contribution to the global
economy. Therefore, Japan can find ways to adapt to the situation and look for alternative
markets to minimize the damage. In addition, Japan may also try to act as a mediator in
negotiations and seek a peaceful solution to the war. The trade war has led to a strengthening
of the Japanese yen, which has made exports more expensive for foreign buyers. This has
made it difficult for Japanese companies to compete with companies from other countries that
have not been affected by the trade war. The Japanese government has taken measures to
support affected industries and workers, including providing financial assistance and
implementing policies to promote domestic demand. However, the impact of the trade war on
the Japanese economy is still significant and may require long-term solutions to address.

4. Germany
Germany is a major exporter of cars and auto parts to the US and China, and the trade war
has reduced demand for these products. The country has also been affected by the impact of
the trade war on global economic growth. The trade war has created a difficult environment
for German businesses to plan and invest in the long-term. This has led to a delay in
investment and innovation, as companies are hesitant to take risks amid the uncertain trade
environment. This can harm the long-term growth and competitiveness of the German
economy, as it may miss out on new opportunities and markets. On the other hand, Germany
has invested heavily in research and development in new areas such as biotechnology, green
technology, and renewable energy. These investments have the potential to provide new
opportunities for growth and diversify the German economy beyond the automotive industry.
However, the impact of the trade war on the broader economy may limit the ability of these
industries to reach their full potential.

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5. Australia
Australia is one of the world's leading exporters and has an economy based on resource
extraction, particularly coal, iron ore, and gas. Australian exports include beef, sugar, wheat,
and walnuts. Australia is heavily dependent on exports to China, especially in the mining and
agricultural sectors. The trade war has led to a drop in demand for Australian exports and
increased uncertainty for businesses that depend on trade with China. In addition, other
Australian businesses and industries, such as tourism and education, could also be affected by
the slowdown in the Chinese market. China is one of the most important markets for
Australia's tourism industry, with millions of Chinese tourists visiting Australia each year.
The decline of the Chinese market will affect Australia's tourism and education sectors.

6. The case of Vietnam

Vietnam's economy has been rapidly expanding in recent years, and one major factor
contributing to this growth is the ongoing trade tensions between the United States and
China. The trade war between these two global powers has resulted in a shift in production
and sourcing strategies for many businesses, leading them to seek alternative markets and
suppliers outside of China. Vietnam, with its low labor costs and favorable investment
climate, has emerged as a popular destination for companies looking to diversify their supply
chains. This trend has resulted in a surge in foreign investment and increased exports for
Vietnam, boosting the country's economy and positioning it as a rising star in the global trade
arena.

1. Positive effects of the trade war on Vietnam

The US-China trade war has had several positive effects on Vietnam's economy, despite the
negative impact it has had on the global economy. Vietnam, as a neighboring country of
China, has been a major beneficiary of the trade war, which has created opportunities for
economic growth and development.

One of the positive effects of the trade war is the increased foreign investment in Vietnam.
As a result of the trade war, many companies have moved their production out of China to
avoid tariffs, and Vietnam has been a major beneficiary of this trend. This has led to a surge
in foreign investment, particularly in the manufacturing sector. This has created job
opportunities for Vietnamese workers and has contributed to the country's economic growth.
Vietnam has become a more attractive destination for foreign investment, as companies look
to diversify their operations and reduce their dependence on China. This has led to increased
foreign direct investment in the country, particularly in manufacturing and infrastructure. In
addition, Vietnam also benefits from China's +1 strategy, in which investors in China transfer
and expand to other countries, in order to increase market access, reduce risks and labor
costs. According to Vietnamese government data, in 2018, Chinese investment in Vietnam
accounted for 6.8% of foreign direct investment (FDI). China's investment is mainly
concentrated in the fields of construction and energy production, the investment scale has
increased from $700 million (in 2011) to more than $2.4 billion (in 2018). China is currently
behind Japan, South Korea and Singapore, becoming the fifth largest source of investment in
Vietnam. The US-China trade war will accelerate the growth of Chinese companies' direct
investment in Vietnam. Vietnam attracts more investors as manufacturers continue to
restructure their supply chains to reduce the impact of US tariffs on China. According to
World Bank data released in December 2018, Vietnam's economic growth rate reached 6.8%

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in 2018, surpassing the overall growth rate of 6.3% of emerging markets in East Asia and the
Pacific.

Another positive effect of the trade war is the increased exports from Vietnam. As a result of
the trade war, Vietnam has seen a significant increase in exports to the US and other
countries. This has been particularly true in areas where Vietnam has a competitive
advantage, such as textiles, footwear, and electronics. This has increased the country's export
revenue and has contributed to its economic growth. The trade war has led to a shift in global
supply chains, with many companies moving production from China to Vietnam to avoid
tariffs. In addition, the US's imposition of tariffs on Chinese exports will make China's goods
less competitive, even creating a trend of shifting US imports from China to other alternative
markets, including Vietnam. Vietnam's agricultural, forestry and fishery products exported to
the US are now quite similar in quality to those of China. According to experts from
Deutsche Bank Hong Kong, exports from Vietnam to the US tend to increase by about 1.7%
in the coming time. Similarly, China's response by imposing tariffs on goods imported from
the US, including agricultural products, may also create opportunities to increase Vietnam's
exports of these groups of goods.

The trade war has also improved trade relations between Vietnam and the US. As companies
have moved their production to Vietnam, the country has become a more important trading
partner for the US, which has created opportunities for closer cooperation and investment.
This has created new opportunities for Vietnamese businesses and has helped to promote
sustainable economic growth. This trade war helped Vietnam accelerate the process of
market restructuring, reducing dependence on the Chinese market when labor costs and tax
incentives are increasing. The increase in exports and foreign investment has contributed to
Vietnam's economic growth, which has been one of the highest in the region. This has created
more job opportunities and increased the standard of living for many Vietnamese.

Finally, the trade war has encouraged Vietnam to improve its business environment and
infrastructure to attract more foreign investment. This has led to increased competitiveness
and has helped Vietnam to position itself as an attractive destination for foreign businesses.
This has created new opportunities for Vietnamese businesses and has contributed to the
country's economic growth. The Vietnamese government has implemented policies to attract
foreign investment and improve the business environment in the country. This has included
measures such as reducing red tape, improving infrastructure, and offering tax incentives.

Overall, the US-China trade war has had several positive effects on Vietnam's economy,
including increased foreign investment, increased exports, improved trade relations with the
US, and increased competitiveness. While the trade war has created challenges and
uncertainties for Vietnamese businesses and workers, it has also created opportunities for
economic growth and development. Vietnam will need to continue to capitalize on these
opportunities and navigate the shifting dynamics of international trade to promote sustainable
economic growth.

2. Negative effects of the trade war on Vietnam

Vietnam is increasingly integrating into the world economy and closely linked to the
interdependent global trading system. The US-China trade war has had significant negative

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effects on the economy of Vietnam. Vietnam, as a neighboring country of China, has been
impacted by the trade war, which has created economic uncertainties and challenges.

One of the negative effects of the trade war is the increased competition for resources and
labor. As companies look for alternatives to China, many have moved their production to
Vietnam, which has led to a surge in foreign investment in the country. However, this has
also created competition for resources and labor, which has driven up costs for Vietnamese
businesses. This has made it more difficult for Vietnam to compete in the global marketplace,
particularly in areas where the country does not have a competitive advantage.

Another negative effect of the trade war is the reduced demand for Vietnam's exports. The
trade war has created uncertainties in the global economy and caused an increase in trade
protectionism, adversely affecting Vietnam's open economy, which has led to reduced
demand for Vietnam's exports in some markets. Vietnam's export growth rate in 2019 is
forecasted to decrease by 0.3% and be stronger in 2021-2023. Similarly, the import growth
rate also decreased by about 0.6%. According to statistics, Vietnam's exports of electronic
products, mobile phones, computers, seafood and agricultural products to China in the first 6
months of 2019 showed a decreasing trend. Among them, the export value of mobile phones
and seafood decreased by 62.3% and 31.5% respectively. This has had a significant impact
on the livelihoods of many Vietnamese farmers and workers.

The trade war has also put pressure on Vietnam to reduce its trade surplus with the US. The
US has put pressure on Vietnam to reduce its trade surplus with the country, which has
created tensions between the two countries. This has led to concerns that the US may impose
tariffs on Vietnamese exports in the future. This has created uncertainties for Vietnamese
businesses and has made it more difficult for them to plan for the long-term. Tariff barriers
from both sides of the US and China will make Vietnamese products lose their advantages,
reduce their competitiveness in the market due to high product prices, and cannot reach
consumers in the two markets. market as well as the markets in which the product is present.

Moreover, Vietnamese enterprises belonging to a link in the product value chain of US or

Chinese enterprises will be directly affected by the impact of this trade war. America's trade
derailment with China could alter a third country's trade balance if the parties wanted to find
a detour to enter the opponent's home turf. Vietnam will likely be grouped with China and
face more difficulties in improving the size and quality of its exports. When the US imposes
tariffs, China may have dumping policies, pushing goods to surrounding countries, including
Vietnam, to reduce dependence on the US and maintain productivity. This may cause the
trade balance between Vietnam and China to return to an upward trend, after we have
achieved the goal of gradually moving towards a balance of trade with this country.

Besides, disputes may arise between Vietnam, the US and China over the issue of traceability
of goods. In fact, Vietnam's major exports to the US include garments, leather and footwear,
electronic and electro-optical equipment, non-metallic chemical and mineral products,
machinery and equipment bags; wood, paper, paper products, printing and publishing... with
ingredients originating from China may borrow the name of production in Vietnam. Or
Vietnam imports grapes, soybeans, and American oats and then exports them to China, but
because of the trade war between the two great powers, these activities will be closely
monitored by both China and the US and use fences. tariffs on imported goods "in transit"
from Vietnam.

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Overall, the US-China trade war has had several negative effects on Vietnam's economy,
including increased competition for resources and labor, reduced demand for exports,
pressure to reduce trade surplus, and increased exposure to global economic fluctuations.
While the trade war has provided opportunities for Vietnam to increase its exports and attract
foreign investment, it has also created significant challenges and uncertainties for the
country's businesses and workers. Vietnam will need to continue to navigate the shifting
dynamics of international trade to mitigate the negative impacts of the US-China trade war
and promote sustainable economic growth.

3. Measures taken by Vietnam to mitigate the negative effects of the trade

war
Vietnam has been a major beneficiary of the trade war between the United States and China.
Besides, it also suffers from many negative impacts from this conflict. Therefore, Vietnam
has also taken several measures to mitigate the negative effects of the trade war and ensure
that it can continue to benefit from the increased investment and trade flows.

One of the most significant steps that Vietnam has taken is to strengthen its trade
relationships with other countries. The country has signed several new trade agreements,
including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
(CPTPP) and the EU-Vietnam Free Trade Agreement. These agreements have opened up new
markets for Vietnamese goods and services, reducing the country's reliance on the US and
China.

Vietnam has also taken steps to improve its infrastructure and business environment, making
it more attractive to foreign investors. The country has invested heavily in its ports, airports,
and highways, making it easier for companies to transport goods in and out of the country. It
has also simplified its investment procedures and reduced bureaucratic red tape, making it
easier for companies to set up operations in the country.

Another measure that Vietnam has taken is to diversify its export markets. While the US and
China remain its two largest trading partners, the country has been actively seeking new
markets for its goods. It has focused on expanding its exports to other Asian countries, as
well as to Europe and Africa. By diversifying its export markets, Vietnam can reduce its
dependence on any single country or region, reducing its vulnerability to fluctuations in the
global economy.
In addition to these measures, Vietnam has also taken steps to mitigate the impact of the trade
war on its domestic economy. The government has provided support to industries that have
been hit hard by the tariffs, such as agriculture and seafood. It has also provided incentives
for companies to invest in industries that are less vulnerable to the trade war, such as high-
tech manufacturing.

Overall, Vietnam has taken a proactive approach to mitigating the negative effects of the US-
China trade war. By diversifying its trade relationships, improving its business environment,
and providing support to vulnerable industries, the country has positioned itself to continue to
benefit from the increased investment and trade flows that have resulted from the trade war.

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4. Conclusion
The US-China trade war has had significant impacts on the global economy, leading to
disruptions in global supply chains and higher prices for consumers. While some countries
have benefited from increased trade with one or both of the superpowers, others have seen
negative impacts on their economies. Vietnam is one country that has benefited from the
trade war, as many companies have relocated their production to Vietnam in order to avoid
tariffs on Chinese goods. This has led to increased foreign investment and growth in the
country's manufacturing sector. However, Vietnam is not immune to the negative effects of
the trade war. The country has also experienced disruptions in its supply chains, as many of
its exports are made using Chinese components. Additionally, Vietnam has faced increased
scrutiny from the US over its currency practices, which could lead to tariffs or other
restrictions on its exports. The US-China trade war has had complex and varied effects on
different countries, and the situation continues to evolve. While some countries like Vietnam
have benefited in the short term, the long-term impacts of the trade war are still uncertain and
could have significant consequences for the global economy.

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