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Fishing in Troubled Waters: The Impact of the US-China Trade War on Vietnam

Author

Listed:
  • PHAM PHUONG NGOC

    (Diplomatic Academy of Vietnam, Hanoi, Vietnam)

  • DAINN WIE

    (National Graduate Institute for Policy Studies, Tokyo, Japan)

Abstract

This study investigates trade diversion in Vietnam, driven by the US-China trade war, which provided Vietnamese firms with relatively favorable access to the US market. Analyzing US import data, we observe a substantial rise in imports of targeted goods from Vietnam due to the trade war. Utilizing microdata from Vietnamese firms, we establish empirical evidence that tariff hikes on Chinese products augmented the likelihood of Vietnamese firms in targeted industries becoming exporters. Employing tariff wedges as an instrumental variable, our findings indicate that firms transitioning into exporters witnessed a significant increase in productivity.

Suggested Citation

  • Pham Phuong Ngoc & Dainn Wie, 2023. "Fishing in Troubled Waters: The Impact of the US-China Trade War on Vietnam," GRIPS Discussion Papers 23-06, National Graduate Institute for Policy Studies.
    • Handle: RePEc:ngi:dpaper:23-06
    as

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    References listed on IDEAS

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    Keywords

    trade diversion; trade war; export; foreign direct investment;
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