The US-China trade war and its impact on the Vietnam’s economy

The US-China trade war, which was initiated by President Donald Trump in 2018, has caused consumers in both countries to suffer when buying goods from the other, escalating import tax sanctions. Exports have also created disruptions in the supply chain of goods, directly affecting businesses and consumers around the world. The escalation of the world's two largest economies has crossed the border of the two countries, strongly affecting many aspects of the Vietnamese economy. In the short term, Vietnamese businesses have the opportunity to boost exports. However, the trade war in the long term will reduce the world economy and reduce foreign demand for Vietnamese goods, on the other hand, goods exported from Vietnam will be exported to the US market. China will be more difficult because China strengthens the enforcement of measures to protect the domestic market due to the geographical location of excess Chinese goods will flow to the Vietnamese market. Especially for FDI enterprises to foreign investment inflows, Vietnam is considered as one of the important destinations of FDI flows out of China thanks to its strategic location, low labor costs, human resources. Abundant resources, a stable political and macro environment, great economic openness and the recent participation in two free trade agreements (CPTPP and EVFTA) have helped manufacturers better access markets. As the main export, it also affects the financial, monetary and banking markets with high interest rates causing high financial costs, which is the cause of reducing profits for many businesses, which is a big pressure on Vietnamese enterprises. Moreover, in the context of the current COVID-19 pandemic, the economy between China, the US and the world, including Vietnam, is also greatly affected. In this article, we propose some solutions and measures that help alleviate this impact on Vietnam’s economy.