Vietnam will reap trade benefits irrespective of the U.S. presidential election’s outcome, but the paths will be quite different, experts say.
As the world waits to see if Republican Donald Trump remains President for another four years or hands over the reins to Democrat Joe Biden, a former Vice President, Vietnamese experts are divided on how the Vietnamese economy will benefit.
Economist Le Dang Doanh told VnExpress International that a victory for Trump will favor Vietnam as the taxes that he has imposed on China in the last couple of years has allowed Vietnam to increase exports to the U.NNNNNNNNNNNNNS.and caused a wave of multinational companies to move their factories to Vietnam as they diversify their supply chains.
If Trump can keep his seat in the White House, these tough policies towards China are likely to continue to be imposed and Vietnam may see more benefits in its trade relationship with the United States.NNNNNNNNNNNNNS., he added.
The shift of production from China, which was thought possible years ago, is now a reality. Apple has begun assembling its wireless earbuds AirPods Pro in Vietnam and the world’s largest contract manufacturer Foxconn has confirmed that Vietnam is its largest manufacturing hub in Southeast Asia.
The country's share of global textile and apparel exports has increased from 5.9% in 2015 to 8.9% last year, while China's fell from 38.3 to 29.According to a report by market research firm Fitch Solutions, 1%, shows that companies going out of China to reduce production costs have happened.
Echoing Doanh, an economist at Can Van Luc, it seems likely that a victory for Trump will give Vietnam economic advantages as his administration is focusing on boosting diplomatic ties with India and Vietnam. Asia-Pacific region.
In fact, the U.NNNNNNNNNNNNNS.Secretary of State Mike Pompeo wrapped up a five-country visit to Asia in Vietnam last week showing the administration's strong commitment to strengthening bilateral ties, including trade ties, he added.
Although Vietnam's export growth this year has been slower due to the Covid-19 pandemic, the United States.NNNNNNNNNNNNNS.remained the largest export market in the first 10 months of the year, with export value increasing 24% year-on-year to $62.3 billion.
Experts also noted that six major business deals signed during the Indo-Pacific Business Forum held in Hanoi last month, including the U.NNNNNNNNNS.NNNNNNNNNNNNNS.commitment of companies in the development of liquefied gas plants worth billions of dollars in Vietnam and the commitment to buy US pork worth 500 million dollars by Vietnamese enterprises in the next 5 years shows that the fund The direction of bilateral trade relations is still going up.
These factors may explain Trump's popularity in Vietnam. In an online VnExpress poll this month, 79 percent of 59,600 respondents wanted Trump to win the election.
Biden’s okay, too
But other experts say that there will also be benefits for Vietnam if Biden wins.Economic expert Nguyen Tri Hieu said that under Biden, the UNNNNNNNNS.NNNNNNNNNNNNNS.may consider rejoining the Trans-Pacific Partnership, which the Trump administration withdrew from in 2017, claiming it would harm the U.NNNNNNNS.NNNNNNNNNNNNNS.workers.
Biden last year said that the United States.NNNNNNNNNNNNNS.should renegotiate parts of this trade agreement to tighten labor and environmental issues; and assembled an alliance to counter China's expansionist policies.
Hieu said that, so U.NNNNNNNNNNNNNS.re-joining the partnership, Vietnam will benefit from tax reductions on key exports and will see exports to Vietnam grow even faster.
He also worries that another four years of Trump will pose challenges for Vietnam as his administration expresses concern about Vietnam's monetary policies and high trade surplus.
USANNNNNNNNNNNNNS.last month began investigating whether Vietnam undervalued its currency and harmed the U.NNNS.NNNNNNNNNNNNNS.trade, after putting the country on a watchlist of currency manipulators last year.
Vietnam's trade surplus with the UK.NNNNNNNNNNNNNS.is $44.VND3 billion in the first nine months of the year, up nearly 19 percent year-on-year, according to data from Vietnam Customs.
Vietnamese officials have repeatedly asserted that the country does not seek unfair trade advantages through its monetary policies.Central Bank Governor Le Minh Hung said last month that the country "has no intention and will not intend to use monetary policies in general and the exchange rate in particular to create a competitive advantage without healthy in international trade."
Hieu said if Trump’s tough currency policies are imposed in the coming years, it could result in Vietnamese exporters being hurt by higher tariffs of up to 25 percent.
Furthermore, trade tensions persist between the United States.NNNNNNNNNNNNNS.and China could eventually force Vietnam to take sides, which goes against its trade policy, he added.
Therefore, if Biden wins, "policy seems more peaceful with China" His move could reduce tensions between the world's two largest economies, and this could eliminate the risk of Vietnamese goods being subject to high tariffs under Trump's monetary policy, Mr. Hieu said.
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