HANOI/BEIJING — On April 14, China's President Xi Jinping emphasized the need for Vietnam to collaborate in maintaining global supply chains amidst the disruptions caused by US tariffs. Xi began his three-nation Southeast Asia tour in Hanoi, the Vietnamese capital. His visit comes as China faces a 145% tariff from the US, while Vietnam is negotiating a reduction in a potential 46% US tariff set to take effect in July, after a global moratorium expires.

Xi, in an article published ahead of his arrival on Monday in Nhandan, Vietnam's Communist Party newspaper, stated, "There are no winners in trade wars and tariff wars, and protectionism has no way out." He further emphasized the importance of safeguarding the multilateral trading system, ensuring stability in global industrial and supply chains, and maintaining an open, cooperative international environment.

Under US pressure, Vietnam has begun tightening trade regulations with China to ensure that goods labeled "Made in Vietnam" and exported to the US have sufficient added value. While Vietnam imports most of its goods from China, the US is its primary export market, with the country supplying electronics, footwear, and apparel to the US.

Vietnam's customs data reveals that in the first quarter of this year, Vietnam imported approximately $30 billion worth of goods from China and exported $31.4 billion to the US. This reflects a long-term trend where imports from China align closely with exports to the US. Xi’s visit to Vietnam, lasting from April 14 to 15, is part of a broader Southeast Asia tour that also includes Malaysia and Cambodia (April 15–18). This marks Xi's second visit to Hanoi in less than 18 months, as he aims to strengthen ties with a strategic neighbor that has attracted substantial Chinese investments in recent years, particularly as Chinese manufacturers have shifted south to avoid US tariffs imposed during the Trump administration.

The two countries are expected to sign approximately 40 agreements across various sectors, according to Vietnam’s Deputy Prime Minister Bui Thanh Son. Vietnam's leader, To Lam, expressed the desire to enhance cooperation in defense, security, and infrastructure, especially focusing on rail links. It remains unclear if the agreements will be legally binding or entail financial commitments.

Vietnam has agreed to use Chinese loans for building new railways between the two nations, a move expected to foster confidence and enhance bilateral trade and connections. However, no formal loan agreement has been announced yet. China is also seeking approval from Vietnam for its COMAC aircraft, which have struggled to gain foreign buyers.

Despite their strong economic ties, the two countries frequently experience tensions over territorial disputes in the South China Sea. Vietnam’s concessions to the US, including the deployment of Elon Musk’s Starlink satellite service and crackdowns on trade with China over possible origin fraud, may further strain relations with Beijing.

In recent months, Vietnam has also imposed anti-dumping duties on certain Chinese steel products and eliminated a tax waiver for low-value parcels, measures aimed at reducing the influx of cheap Chinese goods. The other two countries on Xi's itinerary, Cambodia and Malaysia, also face significant US tariffs (49% and 24%, respectively) and have begun seeking relief from the US.

Disclaimer: This image is taken from Reuters.