Will (China plus one, put Vietnam in Trump S trade cross hours?

Hanoi could become a victim of its own success after building up a huge trade surplus with the US.

- A. Anantha Lakshmi

Vietnam was one of the biggest beneficiaries of Donald Trump's trade war with China during his first term in office. But Hanoi could become a victim of its own good fortune, business groups and analysts have warned, if the President-elect follows through on threats of blanket tariffs when he returns to the White House.

Vietnam has racked up the fourth-largest trade surplus with the US in recent years - trailing China, Mexico and the European Union - as global manufacturers shifted factories away from China to avoid the impact of Trump's tariffs.

But that "China plus one" success has put Vietnam in a vulnerable position. Its economy has become heavily dependent on the US, which accounts for nearly 30 per cent of all of Vietnam's exports.

"Vietnam is now likely to face stricter scrutiny, especially for goods transiting through Vietnam to bypass tariffs on China," said Mr Marco Forster, Asean director at Dezan Shira & Associates in Ho Chi Minh City.

Trump has vowed to impose tariffs of 60 per cent on imports from China and up to 20 per cent on goods from all other countries. Economists at Singapore bank OCBC have warned that Vietnam's economic growth - which was 5 per cent in 2023 - could shed up to 4 percentage points under such measures.

"If tariffs were to be imposed on Vietnam, the effects could be catastrophic," Mr Forster said.

While Trump did not mention Vietnam during the recent presidential election campaign, he called out the country in 2019 as "almost the single worst abuser of everybody".

"Vietnam takes advantage of us even worse than China," he told Fox Business.