April 8, 2025 • 18 mins
US President Donald Trump shocked the world -- and global markets -- with tariffs that exceeded expectations last week. But there was one region that was hit harder than most: Asia. Exporting powerhouses like China and Vietnam were slapped with some of the highest levies of any country, with China now facing an additional 50% tariff, bringing the total rate of its levies to more than 100%.
On today's Big Take Asia Podcast, host K. Oanh Ha sits down with Bloomberg's John Liu in Beijing and John Boudreau in Ho Chi Minh City to discuss the reactions from Asian economies and how the tariff onslaught may upend the trading world order.
Read more:
Trump’s Tariffs and China Collide to Shock the $115 Trillion Global Economy
Tariffs Rip Through Southeast Asia Stocks, Sink Vietnam’s Market
Further listening:
The Trump Trade War’s First Casualty? The Bull Market
Trump Announces Sweeping New Tariffs. What’s Next
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. In a few moments,
I will sign a historic executive order instituting reciprocal tariffs
on countries throughout the world.
Speaker 2 (00:18):
Reciprocal. US President Donald Trump's tariff blitz shocked the world
and caused a meltdown of global markets, wiping out trillions
of dollars for investors, and less than a week after
he announced the steepest American tariffs in more than a century,
Trump on Monday threatened China with further tariffs an additional
(00:39):
fifty percent if Beijing didn't remove the retaliatory tariffs it
recently placed on US imports. Much like China, other export
powerhouses in Asia have been hit with reciprocal tariffs far
greater than the baseline ten percent Levey placed on all
imports to the US. American allies such as your Pan
(01:00):
and South Korea are facing tariffs of twenty four percent
and twenty five percent, respectively, and the levee for Vietnam,
one of the fastest growing trade partners for the US,
is almost double that and panicked investors sent stock markets
nose diving. Asian stocks from Shanghai to Tokyo to Mumbai,
plunged by levels not seen in almost two decades. Hong
(01:23):
Kong's benchmark Kansang Index had its worst day on Monday
since nineteen ninety seven, wiping out all of its gains
for the year.
Speaker 3 (01:31):
Connage, panic, blood bob doesn't even begin to cut it.
And you look at the declines on the region's benchmar
since two thousand and eight. It is across all asset classes.
We're seeing the reeling from this ramped up tariff walk.
Speaker 2 (01:48):
In response to Trump's threats, China took the gloves off,
vowing to fight to the end if the US insists
on going its own way.
Speaker 4 (01:58):
The tariffs announced on Liberation Day by President Trump comme
at the worst time for Chinese economy.
Speaker 2 (02:04):
John lu Is Bloomberg, Senior executive editor for Greater China,
based in Beijing.
Speaker 4 (02:09):
It takes away the biggest highlight, which was trade, and
it also means that China is put in a position
where it feels it has to respond and retaliate, which
it has done. That means the threat of a real,
full blown trade war has escalated tremendously. If that happens,
that's going to be bad for the US. It's going
to be bad for China. It's going to be bad
(02:30):
for Asia and the rest of the world because if
the world and Asia cannot trade with the US and
the Chinese economy is nowhere in a place to be
able to take on that additional burden, then where are
people going to send their goods and products? And what
are companies going to do about employment?
Speaker 2 (02:49):
Welcome to The Big Take Asia from Bloomberg News. I'm Wanha.
Every week we take you inside some of the world's
biggest and most powerful economies and the markets, tycoon and
businesses that drive this ever shifting region. Today on the show,
the impact of Trump's tariffs on Asia's economic powerhouses. Is
(03:09):
this the end of global trade? And how will the
US tariffs reorder relationships across Asia? John, can you break
down Trump's tariff announcements on China and what it means?
Speaker 4 (03:28):
The Liberation Day announcement added an additional thirty odd percent
to the tariffs. There were already twenty percent levied because
of fentanyl, and so that took tariffs on all Chinese
products to well over fifty percent. That's crazy, It's the
world we live in today.
Speaker 2 (03:46):
And that was followed by still more from the White House.
Last year, Chinese companies shipped more than five hundred and
twenty billion dollars in goods to the US, accounting for
some fifteen percent of all of its exports. Exports contributed
to nearly a third of China's economic expansion. Last year.
The country's global trade surplus soared to a record of
(04:08):
almost a trillion dollars as higher US tariffs and the
threat of more to come drove companies to front load shipments. John,
what risks do the latest tariffs pose to China? We
know that it just at a GDP growth target of
five percent last month, which was already ambitious. Right.
Speaker 4 (04:26):
Trade has been by far the highlight of China's economy
over the last couple of years. At the same time,
you had problems like real estate, which was a drag
on economic growth. You had sedated consumption in China that
was also a drag. You even't actually had government spending
falling off and becoming a drag on the economy in
(04:46):
twenty twenty four, and so going to twenty twenty five
with what was a fairly ambitious target of five percent
growth for the year, that looks much harder to achieve
if you're not going to have that assistance, that input
that benefit from trade.
Speaker 2 (05:02):
Do we have a sense of what sectors will be
hardest hit in China? Are there any companies that stand
to lose a lot?
Speaker 4 (05:08):
The sectors that will be most affected are the ones
that have the lower margins, so things like clothing, apparel, toys,
lower end electronics. Those things will suffer the most because
the companies that were making those things and exporting them
to the United States had the thinnest of margins of error,
(05:28):
and when these tariffs come in, it will probably wipe
out whatever business they had going on in the US.
Speaker 2 (05:35):
It sounds like the tariffs are going to bring on
a lot of pain for some Chinese manufacturers and exporters.
How has China then responded to Trump's tariffs so far so?
Speaker 4 (05:44):
In addition to announcing a thirty four percent tariff on
all American goods and retaliation, China also announced that it
was going to limit exports of the several rare earth
metals to the United States. And these metals are used
in lots of high in manufactured goods, high tech goods,
and China is the world's largest supplier of rare earth metals.
(06:08):
It has lots of technologies when it comes to refining
these metals, and so if China cuts off that supply,
it's going to have a real impact on the ability
of American manufacturing to keep going.
Speaker 2 (06:19):
Beijing is now pledging to retaliate and vowing to fight
to the end. Does that reflect the sentiment on the ground.
Is Beijing feeling pressure to take off the gloves now?
Speaker 4 (06:30):
Everything so far points to relatively widespread support for retaliation
against the tariffs that President Trump announced on Liberation Day.
I think President Trump, having introduced to the tariffs in
such a loud way in the Rose Garden, I think
that has gotten populace around the world, certainly here in
(06:53):
China feeling more aggrieved and wanting more for their governments
or definitely for the Chinese government to retal to defend
the Chinese rights.
Speaker 2 (07:03):
John Trump says his policies are designed to bring back
manufacturing to the US. Is anybody in China talking about
relocating to the US. Is that even feasible?
Speaker 4 (07:14):
So if you look at some of the companies, foreign
companies that have pledged to invest in the United States,
you have companies like TSMC, they make semiconductors. That's a
very high margin product. They can afford to do something
like invest one hundred billion dollars in the United States
to build a factory that manufacturing does not depend on
cheap labor. It doesn't need to be in China as much.
(07:37):
The problem there, though, is I think a lot of
those processes are very automated. I'm not sure how much
employment they will generate, certainly not as much as President
Trump wants, and the other things. They are more labor intensive,
lower in manufacturing. Even if those things are not being
(07:59):
done in China, it's very hard to imagine how they
can be competitive in the United States relative to Latin
America or Southeast Asia or some of these other lower
cost places. Working in a factory for ten hours a
day doing hard manual labor is not i would say,
the American dream.
Speaker 2 (08:17):
No, it's definitely not. Now. The US certainly isn't making
any friends with this policy. How will this reshape relationships
in Asia? And really, when you look at China's footprint
in the region, what does that.
Speaker 4 (08:29):
Mean in Asia? You have many countries in this region
who have really prospered over the last twenty to thirty
years by participating in Chinese economic growth. Sending commodities, sending machinery,
sending all sorts of goods to China, selling to China,
but at the same time enjoying the security of being
(08:52):
partnered allied with the United States, and so really in
a goldilock situation. But that is very clearly coming to
an end with the tariffs. It raises lots of questions
about how much countries here in Asia can depend on
the US, not only for security, but also for economic ties,
(09:13):
for trade, and when they compare how tumultuous and unexpected
and uncertain policy is coming out of Washington, DC with
what has been relative stability from Beijing. I think it
will lead countries to reconsider how they balance their relationships
(09:33):
between the United States and China. I don't think that
necessarily means that we're going to see a broad migration
away from the US and towards China, because ultimately you
have a lot of countries Japan, for example, the Philippines,
Australia that are very suspicious of Chinese intent and they
have territorial disputes, and so it means they are not
(09:56):
going to be wholeheartedly embracing Beijing, but they will be
tweaking the balance of their relationship between Beijing and Washington.
Speaker 2 (10:06):
After the break, how Asian countries plan to navigate the
tightrope between Beijing and Washington, and how Trump's tariffs are
rattling manufacturers in Asia's emerging economies. Alongside China, other Asian
(10:33):
countries Vietnam, Thailand, and India are also hit hard by
Trump's latest tariffs. These countries are often referred to as
China plus one economies. That's where companies hedge their bets
by not just having factories in China, but also setting
up supply chains in other countries, hence the plus one
(10:53):
to protect themselves against geopolitical risks. These China plus one
economies have come to rely on the US as a
major trading partner. Vietnam, for example, gets about thirty percent
of its GDP from exports to the US and around
the world. The country had the third biggest trade deficit
with US last year, and it's now facing a forty
(11:15):
six percent duty now. To understand better how the latest
tariffs are going to affect these emerging China plus one economies,
we spoke with John Boudreaux, a Bloomberg Southeast Asia editor
based in Hocheman City, Vietnam's financial capital, John, factory owners
in Vietnam that supplied to the US are they freaking
out right now? You know?
Speaker 1 (11:37):
I don't think anyone saw this coming. Words like stunned, shocked, terrifying,
of being uttered on streets, cafes, factory floors, even in
government offices. There's fears of lost jobs and incomes for
many Vietnamese, particularly those who's lies. They were desperately poor,
and the shifting global supply chains just profoundly change their lives.
Speaker 2 (12:03):
Now, John Trump has been talking about teris for a while,
and there have been some early indications that Vietnam might
be targeted. Did Vietnam totally not see this coming or
was it just not prepared for terras to be so high?
Speaker 1 (12:16):
Yeah, it was the high that that shocked them back.
During Tom's first term, he actually at one point said
that Vietnam took advantage of the US quote even worse
than China. So that could have been an early warning sign.
Speaker 2 (12:31):
And how much can these latest tariffs damage Vietnam's economy.
Speaker 1 (12:35):
Vietnam's exports represent roughly ninety percent of GDP. It's huge,
and the US is its largest market. Your Nike shoes,
your Samsung phone, your Apple gadget is coming from Vietnam
and other countries. And so if suddenly you're seeing a
you know, forty six percent tax hike on that, that's
(12:58):
going to hurt. I'm in Vietnam has very aggressive growth
plans this year eight percent. If this continues, they're going
to have to be dialing back.
Speaker 2 (13:08):
You mentioned Apple, John, Do we have a sense of
what other businesses in industries might be the hardest hit
at first?
Speaker 1 (13:16):
Well, certainly industries like the garment industry here just so
relies on the US market. Vietnam is like the second
largest supplier of shoes and clothes to the US. Anything
that makes their products prohibitedly expensive for consumers just absolutely
freaks them out. Nike makes about half of its shoes
(13:36):
in Vietnam. Adidas it's thirty nine percent. Abercrombie and Fitch
gets thirty percent of its merchandise from Vietnam, On and
on and on. It's like a who's who of global
clothes brands and shoe brands are here.
Speaker 2 (13:49):
Is there a risk that could really change very quickly?
Speaker 4 (13:52):
Now?
Speaker 1 (13:52):
I don't know if it could change quickly in the
sense of suddenly people pivoting away from Vietnam because I
don't think it's easy to set up a factory. These werekers,
even workers making shoes. They're very specialized and the factories
are specialized, so it's not something you can just pick
up and move. Plus, so many other countries are being
hit with tariffs too, so the fear would be okay,
so we all back up and moved to country ts Well,
(14:14):
who to say you're not going to suddenly have a
major bullseye on your economy too.
Speaker 2 (14:20):
After Trump made the shock announcement, Vietnam Communist Party chief
Though Lum reached out to Trump in a phone call
and offered to drop all tariffs on US goods. Trump
described the call between them as very productive and indicated
that the two leaders would meet. Meanwhile, Trump trade advisor
Peter Navarro suggested that Vietnam's initiative didn't go far enough,
(14:43):
since that doesn't get rid of the trade deficit it
has with the US. Now, John, apart from Vietnam, you've
got Cambodia, Philippines, Thailand, India. These are all emerging countries
that rely on exports for growth. How are the Southeast
Asia and South Asian countries interpreting the new tariffs pasink.
Speaker 1 (15:04):
If this continues, if this isn't just a quick shock
and all move by the US to get people to
the negotiating tables to cut deals, I think it's gonna
dent a lot of economies. I think it's very disconcerting
for a lot of these countries as governments.
Speaker 2 (15:21):
And John do you see these emerging economies perhaps trying
to make a deal like Vietnam. Will they try to
play nice by saying, we'll cut all our teriffs if
you drop yours.
Speaker 1 (15:31):
I think you're going to see a lot of delegations
going to Washington. These economies in the Southeast Asia, they
can't match the firepower of China or the EU, and
their economies are much smaller, so I don't think they
could make this kind of threats. They have to just
negotiate their way through this and just hope that they
can come up with a package of deals that will
(15:55):
cause the White House to relent and ease some of
these terrors.
Speaker 2 (16:00):
All of these emerging economies we've mentioned, they've been caught
between the two superpowers, between the US and China. How
do the tariffs and Trump's policies change the way that
they're walking this tight groupe.
Speaker 1 (16:13):
You know, Vietnam has long relied on what it calls
bamboo diplomacy, the idea that the bamboo moves in the
wind can move the direction when it has to, and
perhaps that could be a template for other governments in
dealing with the Trump administration. They are very adept at
figuring out what the great powers want and how to
(16:36):
make sure they don't get caught between the disputes so
their great powers or get entangled in issues like this. Now,
it still is not an easy situation to deal with.
I think this could possibly alter some of the US's
relationships with countries in this region. Certainly China spends a
(16:57):
lot of time and effort willing them. Yeah, she's in things,
planning a trip fairly soon to Vietnam and some other countries,
and he's not coming in with a big stick of
terrors and yelling at people. So in the long term
this could really benefit China geopolitically in this region.
Speaker 2 (17:19):
This is the Big Take Asia from Bloomberg News. I'm wanh.
This episode was produced by Young Young and Naomi. It
was edited by Grace Jennings Ed quist and fact check
by Naomi and David Fox. Mixed and sound designed by
Taka Yesuzawa and Alex Uguira. Our senior producer is Naomi Shaven.
Our senior editor is Elizabeth Ponso. Our deputy executive producer
(17:42):
is Julia Weaver. Our executive producer is Nicole Beemsterbower. Sage
Bowman is Bloomberg's head of podcasts. If you like this episode,
make sure to subscribe and review The Big Take Asia
wherever you listen to podcasts. It really helps people find
the show. Thanks for listening, See you next time.
Bloomberg Audio Studios, podcasts, radio news. In a few moments,
I will sign a historic executive order instituting reciprocal tariffs
on countries throughout the world.
Speaker 2 (00:18):
Reciprocal. US President Donald Trump's tariff blitz shocked the world
and caused a meltdown of global markets, wiping out trillions
of dollars for investors, and less than a week after
he announced the steepest American tariffs in more than a century,
Trump on Monday threatened China with further tariffs an additional
(00:39):
fifty percent if Beijing didn't remove the retaliatory tariffs it
recently placed on US imports. Much like China, other export
powerhouses in Asia have been hit with reciprocal tariffs far
greater than the baseline ten percent Levey placed on all
imports to the US. American allies such as your Pan
(01:00):
and South Korea are facing tariffs of twenty four percent
and twenty five percent, respectively, and the levee for Vietnam,
one of the fastest growing trade partners for the US,
is almost double that and panicked investors sent stock markets
nose diving. Asian stocks from Shanghai to Tokyo to Mumbai,
plunged by levels not seen in almost two decades. Hong
(01:23):
Kong's benchmark Kansang Index had its worst day on Monday
since nineteen ninety seven, wiping out all of its gains
for the year.
Speaker 3 (01:31):
Connage, panic, blood bob doesn't even begin to cut it.
And you look at the declines on the region's benchmar
since two thousand and eight. It is across all asset classes.
We're seeing the reeling from this ramped up tariff walk.
Speaker 2 (01:48):
In response to Trump's threats, China took the gloves off,
vowing to fight to the end if the US insists
on going its own way.
Speaker 4 (01:58):
The tariffs announced on Liberation Day by President Trump comme
at the worst time for Chinese economy.
Speaker 2 (02:04):
John lu Is Bloomberg, Senior executive editor for Greater China,
based in Beijing.
Speaker 4 (02:09):
It takes away the biggest highlight, which was trade, and
it also means that China is put in a position
where it feels it has to respond and retaliate, which
it has done. That means the threat of a real,
full blown trade war has escalated tremendously. If that happens,
that's going to be bad for the US. It's going
to be bad for China. It's going to be bad
(02:30):
for Asia and the rest of the world because if
the world and Asia cannot trade with the US and
the Chinese economy is nowhere in a place to be
able to take on that additional burden, then where are
people going to send their goods and products? And what
are companies going to do about employment?
Speaker 2 (02:49):
Welcome to The Big Take Asia from Bloomberg News. I'm Wanha.
Every week we take you inside some of the world's
biggest and most powerful economies and the markets, tycoon and
businesses that drive this ever shifting region. Today on the show,
the impact of Trump's tariffs on Asia's economic powerhouses. Is
(03:09):
this the end of global trade? And how will the
US tariffs reorder relationships across Asia? John, can you break
down Trump's tariff announcements on China and what it means?
Speaker 4 (03:28):
The Liberation Day announcement added an additional thirty odd percent
to the tariffs. There were already twenty percent levied because
of fentanyl, and so that took tariffs on all Chinese
products to well over fifty percent. That's crazy, It's the
world we live in today.
Speaker 2 (03:46):
And that was followed by still more from the White House.
Last year, Chinese companies shipped more than five hundred and
twenty billion dollars in goods to the US, accounting for
some fifteen percent of all of its exports. Exports contributed
to nearly a third of China's economic expansion. Last year.
The country's global trade surplus soared to a record of
(04:08):
almost a trillion dollars as higher US tariffs and the
threat of more to come drove companies to front load shipments. John,
what risks do the latest tariffs pose to China? We
know that it just at a GDP growth target of
five percent last month, which was already ambitious. Right.
Speaker 4 (04:26):
Trade has been by far the highlight of China's economy
over the last couple of years. At the same time,
you had problems like real estate, which was a drag
on economic growth. You had sedated consumption in China that
was also a drag. You even't actually had government spending
falling off and becoming a drag on the economy in
(04:46):
twenty twenty four, and so going to twenty twenty five
with what was a fairly ambitious target of five percent
growth for the year, that looks much harder to achieve
if you're not going to have that assistance, that input
that benefit from trade.
Speaker 2 (05:02):
Do we have a sense of what sectors will be
hardest hit in China? Are there any companies that stand
to lose a lot?
Speaker 4 (05:08):
The sectors that will be most affected are the ones
that have the lower margins, so things like clothing, apparel, toys,
lower end electronics. Those things will suffer the most because
the companies that were making those things and exporting them
to the United States had the thinnest of margins of error,
(05:28):
and when these tariffs come in, it will probably wipe
out whatever business they had going on in the US.
Speaker 2 (05:35):
It sounds like the tariffs are going to bring on
a lot of pain for some Chinese manufacturers and exporters.
How has China then responded to Trump's tariffs so far so?
Speaker 4 (05:44):
In addition to announcing a thirty four percent tariff on
all American goods and retaliation, China also announced that it
was going to limit exports of the several rare earth
metals to the United States. And these metals are used
in lots of high in manufactured goods, high tech goods,
and China is the world's largest supplier of rare earth metals.
(06:08):
It has lots of technologies when it comes to refining
these metals, and so if China cuts off that supply,
it's going to have a real impact on the ability
of American manufacturing to keep going.
Speaker 2 (06:19):
Beijing is now pledging to retaliate and vowing to fight
to the end. Does that reflect the sentiment on the ground.
Is Beijing feeling pressure to take off the gloves now?
Speaker 4 (06:30):
Everything so far points to relatively widespread support for retaliation
against the tariffs that President Trump announced on Liberation Day.
I think President Trump, having introduced to the tariffs in
such a loud way in the Rose Garden, I think
that has gotten populace around the world, certainly here in
(06:53):
China feeling more aggrieved and wanting more for their governments
or definitely for the Chinese government to retal to defend
the Chinese rights.
Speaker 2 (07:03):
John Trump says his policies are designed to bring back
manufacturing to the US. Is anybody in China talking about
relocating to the US. Is that even feasible?
Speaker 4 (07:14):
So if you look at some of the companies, foreign
companies that have pledged to invest in the United States,
you have companies like TSMC, they make semiconductors. That's a
very high margin product. They can afford to do something
like invest one hundred billion dollars in the United States
to build a factory that manufacturing does not depend on
cheap labor. It doesn't need to be in China as much.
(07:37):
The problem there, though, is I think a lot of
those processes are very automated. I'm not sure how much
employment they will generate, certainly not as much as President
Trump wants, and the other things. They are more labor intensive,
lower in manufacturing. Even if those things are not being
(07:59):
done in China, it's very hard to imagine how they
can be competitive in the United States relative to Latin
America or Southeast Asia or some of these other lower
cost places. Working in a factory for ten hours a
day doing hard manual labor is not i would say,
the American dream.
Speaker 2 (08:17):
No, it's definitely not. Now. The US certainly isn't making
any friends with this policy. How will this reshape relationships
in Asia? And really, when you look at China's footprint
in the region, what does that.
Speaker 4 (08:29):
Mean in Asia? You have many countries in this region
who have really prospered over the last twenty to thirty
years by participating in Chinese economic growth. Sending commodities, sending machinery,
sending all sorts of goods to China, selling to China,
but at the same time enjoying the security of being
(08:52):
partnered allied with the United States, and so really in
a goldilock situation. But that is very clearly coming to
an end with the tariffs. It raises lots of questions
about how much countries here in Asia can depend on
the US, not only for security, but also for economic ties,
(09:13):
for trade, and when they compare how tumultuous and unexpected
and uncertain policy is coming out of Washington, DC with
what has been relative stability from Beijing. I think it
will lead countries to reconsider how they balance their relationships
(09:33):
between the United States and China. I don't think that
necessarily means that we're going to see a broad migration
away from the US and towards China, because ultimately you
have a lot of countries Japan, for example, the Philippines,
Australia that are very suspicious of Chinese intent and they
have territorial disputes, and so it means they are not
(09:56):
going to be wholeheartedly embracing Beijing, but they will be
tweaking the balance of their relationship between Beijing and Washington.
Speaker 2 (10:06):
After the break, how Asian countries plan to navigate the
tightrope between Beijing and Washington, and how Trump's tariffs are
rattling manufacturers in Asia's emerging economies. Alongside China, other Asian
(10:33):
countries Vietnam, Thailand, and India are also hit hard by
Trump's latest tariffs. These countries are often referred to as
China plus one economies. That's where companies hedge their bets
by not just having factories in China, but also setting
up supply chains in other countries, hence the plus one
(10:53):
to protect themselves against geopolitical risks. These China plus one
economies have come to rely on the US as a
major trading partner. Vietnam, for example, gets about thirty percent
of its GDP from exports to the US and around
the world. The country had the third biggest trade deficit
with US last year, and it's now facing a forty
(11:15):
six percent duty now. To understand better how the latest
tariffs are going to affect these emerging China plus one economies,
we spoke with John Boudreaux, a Bloomberg Southeast Asia editor
based in Hocheman City, Vietnam's financial capital, John, factory owners
in Vietnam that supplied to the US are they freaking
out right now? You know?
Speaker 1 (11:37):
I don't think anyone saw this coming. Words like stunned, shocked, terrifying,
of being uttered on streets, cafes, factory floors, even in
government offices. There's fears of lost jobs and incomes for
many Vietnamese, particularly those who's lies. They were desperately poor,
and the shifting global supply chains just profoundly change their lives.
Speaker 2 (12:03):
Now, John Trump has been talking about teris for a while,
and there have been some early indications that Vietnam might
be targeted. Did Vietnam totally not see this coming or
was it just not prepared for terras to be so high?
Speaker 1 (12:16):
Yeah, it was the high that that shocked them back.
During Tom's first term, he actually at one point said
that Vietnam took advantage of the US quote even worse
than China. So that could have been an early warning sign.
Speaker 2 (12:31):
And how much can these latest tariffs damage Vietnam's economy.
Speaker 1 (12:35):
Vietnam's exports represent roughly ninety percent of GDP. It's huge,
and the US is its largest market. Your Nike shoes,
your Samsung phone, your Apple gadget is coming from Vietnam
and other countries. And so if suddenly you're seeing a
you know, forty six percent tax hike on that, that's
(12:58):
going to hurt. I'm in Vietnam has very aggressive growth
plans this year eight percent. If this continues, they're going
to have to be dialing back.
Speaker 2 (13:08):
You mentioned Apple, John, Do we have a sense of
what other businesses in industries might be the hardest hit
at first?
Speaker 1 (13:16):
Well, certainly industries like the garment industry here just so
relies on the US market. Vietnam is like the second
largest supplier of shoes and clothes to the US. Anything
that makes their products prohibitedly expensive for consumers just absolutely
freaks them out. Nike makes about half of its shoes
(13:36):
in Vietnam. Adidas it's thirty nine percent. Abercrombie and Fitch
gets thirty percent of its merchandise from Vietnam, On and
on and on. It's like a who's who of global
clothes brands and shoe brands are here.
Speaker 2 (13:49):
Is there a risk that could really change very quickly?
Speaker 4 (13:52):
Now?
Speaker 1 (13:52):
I don't know if it could change quickly in the
sense of suddenly people pivoting away from Vietnam because I
don't think it's easy to set up a factory. These werekers,
even workers making shoes. They're very specialized and the factories
are specialized, so it's not something you can just pick
up and move. Plus, so many other countries are being
hit with tariffs too, so the fear would be okay,
so we all back up and moved to country ts Well,
(14:14):
who to say you're not going to suddenly have a
major bullseye on your economy too.
Speaker 2 (14:20):
After Trump made the shock announcement, Vietnam Communist Party chief
Though Lum reached out to Trump in a phone call
and offered to drop all tariffs on US goods. Trump
described the call between them as very productive and indicated
that the two leaders would meet. Meanwhile, Trump trade advisor
Peter Navarro suggested that Vietnam's initiative didn't go far enough,
(14:43):
since that doesn't get rid of the trade deficit it
has with the US. Now, John, apart from Vietnam, you've
got Cambodia, Philippines, Thailand, India. These are all emerging countries
that rely on exports for growth. How are the Southeast
Asia and South Asian countries interpreting the new tariffs pasink.
Speaker 1 (15:04):
If this continues, if this isn't just a quick shock
and all move by the US to get people to
the negotiating tables to cut deals, I think it's gonna
dent a lot of economies. I think it's very disconcerting
for a lot of these countries as governments.
Speaker 2 (15:21):
And John do you see these emerging economies perhaps trying
to make a deal like Vietnam. Will they try to
play nice by saying, we'll cut all our teriffs if
you drop yours.
Speaker 1 (15:31):
I think you're going to see a lot of delegations
going to Washington. These economies in the Southeast Asia, they
can't match the firepower of China or the EU, and
their economies are much smaller, so I don't think they
could make this kind of threats. They have to just
negotiate their way through this and just hope that they
can come up with a package of deals that will
(15:55):
cause the White House to relent and ease some of
these terrors.
Speaker 2 (16:00):
All of these emerging economies we've mentioned, they've been caught
between the two superpowers, between the US and China. How
do the tariffs and Trump's policies change the way that
they're walking this tight groupe.
Speaker 1 (16:13):
You know, Vietnam has long relied on what it calls
bamboo diplomacy, the idea that the bamboo moves in the
wind can move the direction when it has to, and
perhaps that could be a template for other governments in
dealing with the Trump administration. They are very adept at
figuring out what the great powers want and how to
(16:36):
make sure they don't get caught between the disputes so
their great powers or get entangled in issues like this. Now,
it still is not an easy situation to deal with.
I think this could possibly alter some of the US's
relationships with countries in this region. Certainly China spends a
(16:57):
lot of time and effort willing them. Yeah, she's in things,
planning a trip fairly soon to Vietnam and some other countries,
and he's not coming in with a big stick of
terrors and yelling at people. So in the long term
this could really benefit China geopolitically in this region.
Speaker 2 (17:19):
This is the Big Take Asia from Bloomberg News. I'm wanh.
This episode was produced by Young Young and Naomi. It
was edited by Grace Jennings Ed quist and fact check
by Naomi and David Fox. Mixed and sound designed by
Taka Yesuzawa and Alex Uguira. Our senior producer is Naomi Shaven.
Our senior editor is Elizabeth Ponso. Our deputy executive producer
(17:42):
is Julia Weaver. Our executive producer is Nicole Beemsterbower. Sage
Bowman is Bloomberg's head of podcasts. If you like this episode,
make sure to subscribe and review The Big Take Asia
wherever you listen to podcasts. It really helps people find
the show. Thanks for listening, See you next time.
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