Vietnam hopeful for tariff truce with US
Rachel Mealey: Fresh from clinching a temporary tariff truce with China, the Trump administration is hoping for similar, more permanent agreements in Asia. Global markets rose this week after the US and China agreed to reduce crippling tariffs on each other for 90 days, and South East Asian countries are watching closely. Among them, Vietnam, which is facing one of the highest tariff rates if its leaders don't strike a deal with Donald Trump by mid-July. Our correspondent Bill Birtles filed this report from Ho Chi Minh City.
Bill Birtles: At a garment factory on the outskirts of Vietnam's biggest city, dozens of workers stitch together clothing for some of the world's biggest brands. Salaries here start at about 500 Australian dollars a month, although 23-year-old Nguyen Ngoc Anh has almost doubled her income over five years at the factory.
Nguyen Ngoc Anh: I'm using the money I earn here to help pay for my younger brother to study. He's only six years old at primary school, so he has many years of schooling ahead of him.
Bill Birtles: Vietnam's economy and exports were growing already when Donald Trump first came to power in early 2017. His first-term tariffs on China prompted some foreign investors and factory owners to move operations south to Vietnam, and workers like Ngo Anh picked up jobs. Now his threat to slug Vietnam with a 46 per cent tariff on everything exported to the US makes her worried.
Ngo Anh: A lot of our exports go to the US, so if the tariffs happen, we won't sell as much and we won't earn as much.
Bill Birtles: South-East Asia is in the crosshairs of the American president's tariff push, with Vietnam second only to Cambodia for the size of the proposed rate. Unlike China, which can restrict rare earths and inputs that US factories need, South-East Asian countries are more vulnerable. Vietnam, for example, largely exports finished products like electronics, furniture, machinery and clothing, and its exports to the US are worth about ten times the value of what Americans sell to Vietnam. But the garment factory owner, Henry Pham Quang Anh, thinks it's just not possible for Americans to start making clothing again.
Henry Pham Quang Anh: I don't think that the people in the US will try to open the factory and still win like that. You need a supply chain, a lot of things. Not easy, not easy, not only money.
Bill Birtles: Vietnam's Communist Party leader, To Lam, has proposed zero tariffs all around between the two countries, an idea that would still probably mean a big trade surplus. He's dispatched negotiators to Washington, and Ho Chi Minh City-based economist, Huynh Thanh Dien, thinks a reduced rate will be the final
Huynh Thanh Dien: outcome. The most likely outcome is that Vietnam will lower tariffs on American goods and products where the US has an advantage, like technology, machinery and aeroplanes, and the US might put lower tariffs on products where we have an advantage, like garments.
Bill Birtles: Vietnam's state media says the country is among six nations given priority treatment by the White House for talks. So workers here are hoping for news of a deal soon. In the meantime, they're getting on with the job amid the uncertainty. This is Bill Birtles in Ho Chi Minh City, reporting for AM.
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