Supply chain reaction: trade war refugees race to relocate to Vietnam, Thailand

“We are on the cusp of the biggest sourcing disruption that we have seen in a generation,” said Stephen Lamar, executive vice-president of the American Apparel & Footwear Association, whose more than 1,000 members contribute over $400 billion annually to U.S. retail sales.

China’s sophistication in areas such as automation means no one country can replace China, said trade lawyer Sally Peng of Sandler, Travis&Rosenberg.

“So everyone is looking for that China Plus One, Plus Two, Plus Three country strategy, all the way to Africa,” she said.

Companies hold out little hope for a truce in the trade dispute when Trump and Xi are due to meet on the sidelines of the G20 summit in Buenos Aires this week.

Indeed, Trump said on Monday he expected to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from the current 10 percent.

While Chinese export data shows little sign yet of an impact from the trade war, some economists say that is because companies are rushing to get shipments out ahead of more tariffs.

Collateral Victims . . . (from the article)

To be sure, smaller emerging Asian economies are not necessarily licking their lips about the prospect of the trade war between the world’s top two economies worsening.

Growth has slowed in the third quarter across Southeast Asia, as well as in Taiwan, Japan and South Korea, with officials partly blaming the trade war for it.

Thailand’s exports of electronic integrated circuits, for instance, rose 4 percent to the United States in October but fell 38 percent to China. Vietnam’s manufacturing sentiment indicator is the highest in Asia but is well off its peak.

A lack of infrastructure is also a problem for countries seeking to pick up business.V Thailand is 41st in World Bank infrastructure quality rankings, Vietnam is 47th, compared to China’s 20th ranking.

Beyond infrastructure bottlenecks, red tape - particularly in Vietnam - remains hard to navigate and skilled labor is not easily available.

Vietnam’s unemployment rate is 2.2 percent. Thailand’s is even lower.

“The proportion of unskilled labor in Vietnam remains large and there hasn’t been any effective plan to improve this issue, and I don’t see any significant change in five or even 10 years,” said the vice chairman of the Vietnam Electronic Industries Association, Nguyen Phuoc Hai.

The hit that seems to be reverbing to other countries who will benefit in their own borders. Is Trump really saving the people all over the world? America can’t hold all the immigrants who want to come here. They must learn to prosper in their own countries. This step by China, forced by Trump, is set to prosper other countries.

Couldn’t agree more on China.

I know we all detest socialism but sometimes I wonder just how expensive it would be to subsidize the building of factories to handle All manufacturing here in the US. I realize I’m suggesting the use of tax dollars here but better our own citizens profit than China or anyone else for that matter. It would also have the secondary effect of added national security in my opinion. Thoughts anyone?

Thanks.

I don’t know if I want to comment on Vietnam since I am a guest here.

I really like this place, I will follow this article, thank you very much.

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