While two of the world's largest economies are currently locked in a bitter trade war, one unlikely winner has emerged. Based on recent data, Vietnam's economy has received a major boost following in the aftermath of China and the United States' trade war.
Based on the results of a recent survey of both Chinese and American companies, these companies have lost a significant portion of their market share, especially to Vietnamese companies. The study was published on Monday by the American Chamber of Commerce in South China, an institution based in the Chinese city of Guangzhou.
According to the report, Chinese companies are also losing sales to companies from South Korea and India. On the other hand, American companies are losing their market share to companies from Japan and Germany.
The trade war between China and the United States started when U.S. President Donald Trump imposed massive tariffs against Chinese goods worth $250 billion. The President demanded that China change some of the key elements of its industrial policy. The Chinese government responded by imposing its own set of tariffs against $60 billion of American exports.
A significant portion of both Chinese and American companies that responded to the survey said that they are experiencing the repercussions of the trade tariffs. Among the chief result of said tariffs is the significant drop in profits.
As a response to the trade war, some companies are moving their facilities out of the affected regions. Panasonic is reportedly moving its car electronics production to Thailand, Mexico, and Malaysia. Chinese companies GoerTek, which is known as one of the leading providers of wireless earphones for Apple has already notified some of its suppliers of their intention to relocate some of its production to Vietnam. Chinese polyester producer Zhejiang Hailide New Material is also investing in a new factory in Vietnam which costs $155 million.
According to the data from the survey, more than half of the companies that were surveyed are expecting the effect of the trade war to last for at least another year. Majority of the companies from the U.S. said that the tariffs imposed by President Trump will not pose any benefit to their company.
Chinese President Xi Jinping and U.S. President Donald Trump are expected to meet next month during the Group of 20 summits in Argentina. Despite this, some analysts are skeptical about whether the issue of the trade war will be brought up during the summit.
