The United States has been fighting a trade war with China over the years and has wanted to put pressure on the Chinese economy by increasing tariffs and technological blockades, and it has found itself suffering.
Trump started this approach when he came to power. Since 2018, he imposed a 25% tariff on US$34 billion of China goods, and later expanded it to US$200 billion, causing chaos in the global supply chain and soaring costs for American companies.
China's economy is recovering rapidly and its manufacturing industry is stable. When the United States saw that direct confrontation was not feasible, it changed its thinking and planned to cultivate new forces in Asia to disperse the pressure on China.
India and Vietnam were selected. These two countries have a large population, cheap labor force, are close to China and have a sensitive geographical location.The abacus of the United States is to help them develop into new manufacturing centers and attract enterprises to move from China, thus indirectly weakening China's influence.
Trump has been using tariffs as a weapon since his first term.After taking office in 2017, he signed a 301 clause investigation in March 2018, targeting China’s intellectual property issues, resulting in a round of tariff war.
In 2020, China and the United States signed a phase one agreement, in which China agreed to buy more U.S. agricultural products and energy, but there were a lot of differences in implementation.
Trump will be elected again in 2024, take office on January 20, 2025, and soon restart the tariff game.
"Liberation Day" tariffs were announced on April 2, generally increasing 10% on all imports, then targeting India by 26% and Vietnam by 26%, saying they were to balance the trade deficit. As a result, corporate orders fell and the Dow Jones index fell.
On July 2nd, we signed an agreement with Vietnam to reduce the tariff to 20%, but increase the tariff by 40% for the goods transshipped from China.
On August 27, it doubled to 50% to India. 66% of India's exports to the United States were affected, and industries such as textile and pharmaceutical were directly recruited. Instead, China and Vietnam have the opportunity to catch up, and Indian companies have to quickly find new markets.
India has 1.4 billion people, the average age of 28, the middle class is rising, the labor potential is great; Vietnam's labor cost is low, trade policy is loose, enterprises to decentralize risks and engage in "China + 1".
The U.S. think tank and experts have cited the "re-create China" strategy, which means to struggle hard with it, rather than help others to get up and spread Chinese orders.
Like the Marshall Plan after World War II, which helped Western Europe and Japan confront the Soviet Union, it now wants to be replicated in Asia.
India has a strategic position in the Indian Ocean, Vietnam holds the South China Sea, and both countries can hold on to China’s geopolitics. The United States starts from three aspects: economy, military and diplomacy.
Economically, Biden pressed the Pacific Economic Framework in 2022, with both India and Vietnam joining.The United States pledged $5 billion in aid to India for new energy and transportation.
In 2022, the United States invested more than $1.5 billion in Vietnam, focusing on electronics and textiles.Apple, Samsung, the major companies moved the production line, and Intel expanded the chip plant in Hanoi.
Military cooperation is also close.
The United States signed an intelligence-sharing agreement with India, the first “2+2” dialogue in 2018, the basic exchange agreement in 2020, the sale of P-8I anti-submarines and Apache helicopters to India, and joint military exercises; the lifting of arms embargo on Vietnam, providing patrol boats and drones.
In September 2023, Biden visited Hanoi to promote Vietnam as a comprehensive strategic partner of the United States.
Diplomatically, the U.S. highest level frequently went, and the G20 summit supported India's entry into the Security Council permanent.The International Strategic Research Institute analyzed that the U.S. strengthened its ties with India in order to balance Asia, aiming at China's new security order.
The infrastructure of India and Vietnam is stretched, India's railways are old, roads are blocked, ports are slow, and logistics costs are high. Vietnam doesn't have enough electricity, and its ports and railways can't keep up with exports.
Politically, India's federalism has many conflicts of interest, making land and labor reform difficult to push forward. The Vietnam system is different from American values, and cooperation has frictions.
The most important thing is that the economies of the two countries are closely tied to China. India imports electronics, machinery and medicines from China, and Vietnam's manufacturing parts come from China. It is even more difficult to completely "de-Chinaize".
In February 2024, media that experts said that it was difficult for Vietnam to replace China in the supply chain and replace China, "the argument cannot stand because China is too deeply integrated into the global economy."
Following Trump’s tariff adjustment, orders were partially returned to China.
Vietnam's exports to the U.S. have increased considerably from 50 billion in 2018, but the volume is far less than China's. India's commercial policy issues have leaked opportunities, costs have risen, and consumers have paid.
In August 2025, the United States revised its reciprocal tariff rate to 50% for India and 20% under the Vietnam framework, but 40% for transshipment of China goods.
Trump's second term began on January 20, and global tariffs rose from 2.5% to more than 18%. The Trump tariff is equivalent to a tax increase of $1,300 per American household.
Vietnam benefited from the decoupling efforts of the first Trump, with Apple and Intel moving over, but experts say Vietnam cannot completely replace China because of insufficient manufacturing capacity.
The U.S. strategy towards China began with Obama's "return to the Asia-Pacific" and shifted to restricting China. Trump intensified tensions in relations, and Biden joined forces with allies to exert indirect pressure.
Now Trump has returned to the palace and continues to promote unilateralism, but he has hurt himself.
Global brands build multi-national procurement strategies, China, Vietnam, India, Cambodia parallel to improve supply chain resilience.
Vietnam's "Four Nos" policy: non-alignment, no foreign bases, no use of one country against another, and no use of threat of force.
This restricts the United States from pulling Vietnam against China. Foreign Affairs magazine said that the United States should not expect Vietnam to help fight against China, but upgrading the partnership shows that Vietnam is worried about China's strength.
The South China Sea dispute, China and Vietnam confrontation, the Spratly Islands have friction. China's industrial fishing vessels are the global illegal fishing giant, the United States and Vietnam signed an agreement to fight illegal fishing, not explicitly but aimed at China.
India and Vietnam cooperate with the United States, but also trade more with China; Vietnam and China are the largest trading partners, and India also relies on Chinese imports.
The United States supports India and Vietnam in confronting China, but the reality is complex.
The two countries have development potential, but their infrastructure politics and economy depend on speed limits. However, Trump's tariff policy has aggravated chaos, but it has not shaken China's position. With the development of multi-polarization in Asia, India, South Asia, Vietnam and Southeast Asia want to share the pie, but China's cake is big, and it is a dream to replace it in the short term.
References:
“China’s growth in the next decade = India + Japan + Indonesia” Global Times 2025-01-03
Economist: The world can't be separated from China Observer Network 2022-06-02