One of the critiques of the Trump administration’s tariff policy on China is that while it raises the cost of doing business in one low-cost country, it just pushes multinationals to do business in another.
Some evidence has emerged that companies have taken business elsewhere after the 25% tariffs imposed on $200 billion of Chinese goods. According to data from UBS, the first $50 billion of Chinese goods subject to the 25% tariff rate saw a 30% nosedise in exports, and the market share of Chinese exports saw the biggest decline in years.
While the Chinese market share of U.S. imports between October and March dropped by 1.7 percentage points, Mexico’s rose by a half point, and Vietnam’s gained by almost the same, according to the UBS data.
Now, President Donald Trump is saying he might go after Vietnam as well.
In an interview with Maria Bartiromo on Fox Business Network, Trump replied that the Southeast Asian country is in the cross-hairs of U.S. trade policy. Also read:Trump says this is his ‘Plan B’ if China-U.S. trade talks collapse
“Well, a lot of companies are moving to Vietnam, but Vietnam takes advantage of us even worse than China,” Trump said.
According to the U.S. Trade Representative, the U.S. imported $47.8 billion of Vietnamese goods and services last year, while it exported $10.5 billion’s worth.
Asked bluntly if he wants to “tariff” Vietnam, Trump did not say no.
“Well, we’re in discussions with Vietnam. Vietnam is almost the single worst – much smaller than China, much, but it’s almost the single worst abuser of everybody,” eliciting a “wow” from his interviewer.
Trump did acknowledge that Vietnam was a large buyer of West Virginian coal, “which makes me happy.”
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