Only one country stands out as a winner in the trade war so far—and it's not the U.S.
This week, a hedge fund manager sent me some thoughts from a CEO of a publicly traded American handbag and luggage brand. Because it was all off the record, I'll keep it simple. The CEO said they ended last year with 54% of their imports sourced in China. By the end of this year, it will be cut by more than half. Their top country for manufacturing now is Vietnam, followed by stitch-and-sew manufacturing clients in Myanmar and Cambodia, all rather quickly replacing China.
One of the countries that always comes out on top in all of this reshuffling is Vietnam. The country, once subject to the “domino theory” and a U.S.-versus-communism war that the U.S. lost , is the biggest beneficiary so far of a supply chain influx. No one else comes close. Pedestrians and traffic pass down a street which is decorated with national flags and banners celebrating the Communist Party in Hanoi. Vietnam has been the biggest beneficiary of the trade war in Asia.A full assessment of the trade-war effect on Asia, therefore, needs to consider Asian exports to both the U.S. and China, says Aidan Yao, the senior China economist for AXA Investment Managers, an $830 billion global asset manager.
Long-term winners may not be the same as the short-term gainers, but Vietnam stands out among them all, based on data compiled by Yao in a report for clients this week.
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