Asian countries such as Thailand and Vietnam are seeing a surge of foreign investors as the US-China trade war continues, according to CNBC.
US-ASEAN Business Council President and CEO Alexander Feldman said that investors are ‘seriously eyeing’ Thailand and Vietnam to shift production out of China. Because of the trade war, the tariffs have gone to the roof, causing a huge backlash to companies.
In fact, Apple Inc. is among the big corporations that suffer from the trade war as their operations are done in China.
Thailand is a good market for labor because of its relaxed regulations. However, Vietnam is on the verge of tightening its regulations due to unfair labor practices and low salary.
Guns, which is a huge market, is set to move to Vietnam yet its Prime Minister is still concerned about the trade deficit. However, if tables will turn, Vietnam couldn’t afford to fight the United States.
US President Donald Trump ordered American companies to immediately look for alternatives and bring companies to different Asian countries.
Feldman said, “Those companies are moving divisions, but you know, I think we’re looking at the tens of millions, hundreds of millions, maybe more. That’s just for Thailand.”
Vietnam as the winner of Trade War
According to the Japanese Investment Bank Nomura’s report, Vietnam is the largest beneficiary with an increase of 7.9 per cent in its GDP. The increase came from the overflowing US imports into the country. Following Vietnam is Chile and Malaysia then Argentina, Hong Kong, and Mexico. Canada also benefits from the trade war being on the tenth spot of the countries who benefitted from the US-China trade war.
Meanwhile, China’s GDP is slowly declining and Yuan value drops at its weakest 7.0810 per dollar. This has been setting a midpoint where China market is signaling depreciation due to the economic backdrop.