Fishing in Troubled Waters: The Impact of the US-China Trade War on Vietnam

Pham Phuong Ngoc and Dainn Wie
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Pham Phuong Ngoc: Diplomatic Academy of Vietnam, Hanoi, Vietnam

No 23-06, GRIPS Discussion Papers from National Graduate Institute for Policy Studies

Abstract: This study investigates trade diversion in Vietnam, driven by the US-China trade war, which provided Vietnamese firms with relatively favorable access to the US market. Analyzing US import data, we observe a substantial rise in imports of targeted goods from Vietnam due to the trade war. Utilizing microdata from Vietnamese firms, we establish empirical evidence that tariff hikes on Chinese products augmented the likelihood of Vietnamese firms in targeted industries becoming exporters. Employing tariff wedges as an instrumental variable, our findings indicate that firms transitioning into exporters witnessed a significant increase in productivity.

Keywords: trade diversion; trade war; export; foreign direct investment (search for similar items in EconPapers)
Pages: 38 pages
Date: 2023-06
New Economics Papers: this item is included in nep-int, nep-sea and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:ngi:dpaper:23-06

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