In a scrum to maintain the wheel of trade, Chinese companies are pivoting to neighboring countries to escape Trump's crippling tariffs.
The Hustle is on display in Vietnam. The factory that makes everything from jeans to Christmas wreaths is about to get there quickly. The number of things that have already been moved continues to increase. Chinese e-commerce platforms Alibaba and Shein are helping companies find manufacturing alternatives in Vietnam.
The race to break out of China has attracted so much pace in recent weeks that fixers in the social media genre have emerged to provide tips on how to re-route products not only through Vietnam but also places like Thailand and Malaysia.
The cost of sending products to the US has skyrocketed in recent weeks, forcing factories to find new trade routes. Last month, Chinese exports to China were released by Chinese government data released on Friday as shipments to the US spiked.
Trump has imposed a 145% tariff on China, but he suspended new tariffs in Vietnam and other Asian countries until early July. Factory throughout the region have entered overdrive.
“It feels like everyone is in a hurry to find a partner in Vietnam,” said Vu Manh Hung, who owns seven factories in northern Vietnam and has been flooded with demand from Chinese companies.
They hoped that his factory could take on orders that became impossible to fill in China with such high tariffs. He did not seal the deal. But that was because his production line was already busy, and by July he was under pressure from American clients to place orders.
This panic in China's supply chain is familiar.
During his first term in 2018, Trump's tariffs on China forced many multinational companies to search for alternative locations to manufacture goods. These tariffs were not steep enough to begin the book of Exodus. Currently, Trump's tariffs are extremely high, halting trade between the two countries and even pushing Chinese companies out of China.
For many Chinese companies, Vietnam is both a long-term solution and a short-term fix. The country shares borders, and Vietnam has a large population of young people willing to crush factory work.
However, Vietnam has its challenges.
Along with dozens of other countries with tariffs pending, Vietnam is trying to work through trade agreements with American officials who want to limit China's use of Vietnam as an alternative method for export.
During the first US-Chinese customs war, Chinese companies built factories in Vietnam. Many of these factories are now increasing orders. One of these is QIS Sport Goods, which started its business in Vietnam in 2019.
“We can now offer competitive prices to our customers,” says Nguyen Jan, a Vietnamese native who joined the company three years ago. “Everything was busy.”
QIS Sport Goods manufactures water sports products such as kickboards, surfboards and stand-up paddle boards in two factories.
The company employs around 150 people in China and 400 people in Vietnam, where it is hustling to hire more.
Another Chinese company, Dongguan Box, recently completed production lines at its Vietnamese factory for American customers such as Tiffany & Company.
Marketing manager Rita Penn said that in April, when Trump began escalating tariffs on Chinese products, he began receiving calls from American customers. They asked: Can she immediately transfer their production to Vietnam?
She was willing to obligate, but Penn said the change had little meaning to her. Picking up paper flowers and elaborate red gift boxes with openings on either side, she explained why.
“If you make this in China, this box is very easy to make,” she said. “It's very easy. But making this whole box in Vietnam makes the cost very high.”
A box that costs $1 in China costs $1.20 in Vietnam, she said. This is mainly because the raw materials need to be shipped. She said her client wanted them to use a Chinese factory to meet orders going to Europe.
Dongguan Box once had 1,000 workers in China, but that number has been reduced to 200. There are currently 600 workers in Vietnam. However, Penn said she was optimistic and thought the situation was temporary.
“I think the US will soon solve these problems,” she said.
The e-commerce platform is playing its role in helping Chinese factories find alternatives.
The scene on the first fashion platform offers incentives to factories in China to help with the costs of moving to Vietnam, according to one factory owner. Alibaba, the e-commerce giant that helps merchants find business partners, also sent Vietnamese employees to find Chinese alternatives before the Vietnamese tariff suspension ended, said the Vietnamese accounting manager at Alibaba.
Shane did not respond to requests for comment.
China's social media has unfolded a surge in agents, providing tips on how to skirt trade rules. For example, a recent post about Xiaohongshu, a Chinese app also known as a renote, outlined how to hide the made origin of a product before shipping to Malaysia or a nearby country and sending it to the US.
“People, the high tariffs imposed by the US in China have reached an astonishing level,” Post said. “But that won't bind our clever people.”
Interest in Vietnam has recently been evident in a city in Guangzhou, southern China. Nie Xiwen, who owns a clothing factory, said some of his companions have begun to expand in Vietnam. For now, he has opposed to doing this because of the logistics that will get fabrics and other materials in Vietnam.
“No place is faster than China,” Nee said.
However, Jia Yue Technology, a Chinese company that manufactures Christmas ribbons, stockings, wreaths and gift bags, has already made a leap into Vietnam. Jack Xu, who was the translator of the company's representative at the Ho Chi Minh fair, said he has shifted more than half of production from China over the past three years. And now, with most of Zia Yue's customers in the US, I'm thinking about whether I should do more in Vietnam.
“You know Christmas items,” Xu said, pointing to the wall of green plastic wreaths. “Americans, they need it!”
Xu said he is confident that Jia Yue Technology has stepped into both countries and will survive the trade war. However, he said he hopes China and the US will come to deal.
“For most Chinese people, we still want to sell things to Americans,” Xu said.
The report was provided by Tung Ngo of Ho Chi Minh City, Zixu Wang of Hong Kong, and Meaghan Tobin and Siyi Zhao of Guangzhou, China.
