Just passing through? The US-China trade war and reconfiguration of global value chains through Vietnam

Tao Zou and Yundan Gong

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We examine how the 2018-19 US-China trade war reconfigured global value chains (GVCs) through Vietnam using firm-to-firm transaction records on cross-border trade and domestic sourcing. We find that exposure to US tariffs on Chinese goods led firms in Vietnam to increase imports from China and exports to the US, with both transshipment and value-added processing contributing along distinct timelines. Tracing domestic supply-chain responses within Vietnam, we show that US tariff hikes on China also increased local intermediate sourcing, but a substantial share of this expansion embodied Chinese intermediate inputs. The results provide firm-level evidence that trade-war-driven relocation of GVCs to Vietnam stimulated local processing activity while deepening Chinese supply-chain linkages in the third country.

Keywords: trade war; supply chain reconfiguration; local sourcing; Vietnam (search for similar items in EconPapers)
JEL-codes: F13 F14 F23 L14 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2026-06
New Economics Papers: this item is included in nep-cna, nep-iaf and nep-sea
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