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: We study whether Vietnam’s export surge during the 2018–2019 U.S.–China trade war was driven by trade diversion using product- and firm-level microdata. U.S. import data show sharp increases in Vietnamese exports of tariff-targeted products, while Vietnam’s imports of the same products from China rise only modestly, indicating substantial diversion and limited detour. Using industry exposure based on U.S. tariff differentials between China and Vietnam, firm fixed-effects estimates show that more exposed firms enter exporting and expand export volumes, especially in industries reliant on Chinese inputs. Exposed firms also increase investment to expand production capacity, consistent with trade diversion.

Keywords: trade diversion; trade war; export; trade detour; Vietnam (search for similar items in EconPapers)
Pages: 49 pages
Date: 2025-12
New Economics Papers: this item is included in nep-int, nep-sea and nep-tra
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Citations: View citations in EconPapers (4)

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