Bangkok – Vietnam’s economic growth goes half if the highly higher American rates are implemented, warned an expert, highlighting the precarious situation in Southeast Asian countries despite a surprise suspension 90 days from President Donald Trump’s price rate.
The nations of Southeast Asia face some of the highest rates threatened by Trump, which would even hang the relatively rich countries in the region such as Malaysia and Thailand. With limited options, many offer concessions in the United States and avoid reprisal measures.
Vietnam, which sends about 30% of its exports to the United States, is in a “precarious position”, said Nguyen Khac Giang, former head of political research in Vietnam Economic and Political Research Institute based in Hanoi.
If the price threatened by 46% on Vietnamese exports is adopted, annual economic growth would fall to 3% to 4% compared to around 8%, he told an online panel organized by the ISEAS-Yusof Ishak Institute in Singapore.
“Half of our textiles and shoes are exported to the United States,” he said. A large increase in prices, said Giang, “could mean the mass layout of millions of Vietnamese workers.”
“For Vietnam, it would be very devastating because we are still in the development period when we have to depend a lot on the manufacturing with a high intensity of workforce,” he said. “It could be very bad, not only for the economic development of Vietnam but also for stability.”
Trump on Wednesday announced a 90 -day break on higher prices for many countries hours after they were supposed to come into force. Likewise, he increased the tariffs on China to 145% after Beijing has traveled his reprisals against the United States at 84%.
Trump claims that tariff shock therapy aims to encourage a renaissance of American manufacturing, which has fallen aside from the economy and employment over several decades of global free trade and production of production in low-cost countries.
Any change could take years because many American companies have made substantial investments in production abroad. In the United States, effective manufacturing, as elsewhere, also depends on the components produced in other countries.
The impact of higher American rates on the countries of Southeast Asia will be determined by the dependence of each economy on international trade and the United States in particular.
Some like Vietnam have counted a lot on export to provide jobs and increase the standard of living and depend on the Chinese and American markets.
Others such as Myanmar, decorated by civil war since 2021, have relatively little trade with the United States, but the country owners of the country told RFA that certain industries and workers could still suffer.
“Myanmar exports are not very important in the United States. However, what is exported includes things like clothes … as well as other finished products such as bags and shoes,” said a business owner who did not want to be appointed. “These articles will face a certain impact, although it is relatively small.”
Indonesia, the largest economy in Southeast Asia and the most populous country in the region with more than 270 million people, is isolated to some extent by its large domestic market and an export dependence indemnity.
Malaysian exporters, on the other hand, already chat with American customers how they can jointly absorb the cost of higher prices – which means both lower profits for exporters who already work on thin profit margins and higher prices for American consumers.
The price of 46% against Vietnam is the third highest among the countries of Southeast Asia and in part reflects the American accusations according to which Vietnam has become a conduit for Chinese manufacturers seeking to avoid American prices on their goods.
Some administration officials said that a third of Vietnam exports to the United States were of Chinese origin. The search for Harvard and Duke universities, said Giang shows that the proportion is 2% to 15%.
The BIRMAN RFA contributed to this report.
Edited by Mike Firn.