31YEN DUONG/BLOOMBERG. DATA: U.S. CENSUS BUREAU
THE BOTTOM LINE Vietnam, whose trade surplus with the U.S.
grew 39% in the first six months of the year, could be the next
country to face punitive tariffs.City, factory walls rise up from land where rows
of rubber trees once stood. Housing for thousands
of workers is being completed, as is a hospital.
There’s a Taiwanese restaurant nearby. One of the
enterprise zone’s operators gets visits from about
18 overseas suppliers a week. That’s triple the nor-
mal rate last year, according to Rose Chang, chief
financial officer of DDK Group, which is involved
in a joint venture with Warburg Pincus-backed
Becamex IDC to operate a 200-acre section of the
industrial park that will be home to Taiwanese com-
panies making products such as headphones, baby
strollers, and swimming pool and patio furniture.
Kinh Bac City Group, which operates similar facil-
ities across the country, has hosted visitors from
90 foreign companies this year that are exploring
moves into one of its northern Vietnam industrial
parks, says Phan Anh Dung, deputy general direc-
tor. On a recent morning, he was taking a break after
meeting with representatives of a Chinese company
looking to set up operations in one of the group’s
parks, about 45 kilometers (28 miles) from Hanoi.
GoerTek Inc., an Apple Inc. supplier based in China,
has begun construction on a $260 million factory
expansion there. “I have never seen anything like
this before,” Dung says. �Xuan Quynh Nguyen and
Nguyen Dieu Tu Uyen, with Nguyen Kieu Giang, Mai
Ngoc Chau, and John Boudreaudescribed Vietnam as “almost the single worst
abuser of everybody.”
The threat of new duties against Vietnamese
products is real, says Sian Fenner, a Singapore-
based economist at Oxford Economics, noting that
the nation’s textile, computer, and seafood exports
to the U.S. are especially at risk. The Americans’
increasingly hostile rhetoric has some companies
rethinking their Vietnam strategy. Eclat Textile
Co., a Taiwanese company that makes sportswear
for Nike Inc. and Lululemon Athletica Inc., says it
needs to shift work out of Vietnam to hedge against
the possibility of the country’s getting caught in
Trump’s tariff assault.
To placate Washington, Vietnam’s leaders have
committed to buying more American products,
including Boeing Co. jets. They also could offer
to expand market access to service sectors, such
as telecommunications, finance, and insurance,
Fenner says.
Prime Minister Nguyen Xuan Phuc has directed
officials to step up efforts to crack down on Chinese
exporters that are rerouting products through the
country. Vietnam is willing to engage in regular
communications with the U.S. to “promptly resolve
any issues that arise,” said Nguyen Phuong Tra, a
spokeswoman at the deputy foreign ministry, in an
emailed statement.
Meanwhile, managers at the country’s industrial
parks can barely cope with the spike in business.
At Bau Bang Industrial Park, north of Ho Chi Minh▲ Bau Bang Industrial
Park has seen a surge
of interest from foreign
manufacturers-20-40$0b● U.S. trade imbalance
with Vietnam2002 2018