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https://twitter.com/Trinhnomics/status/1244090203486195717

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Trinh

@Trinhnomics

Oct 15

https://twitter.com/stevehou0/status/1978379197115519049

Good question. Let me just answer this with below tables.

First, whatever China lost in market share in exports to the US, Vietnam has gained. The best example is in mobile phones.

Now, is it REROUTING? As in just Chinese phones that are then trans-shipped to the US?

https://twitter.com/stevehou0/status/1978379197115519049

First, we have to realize that Vietnam went through two stages of FDI.

The first stage is driven by NORTH ASIANS that are basically fed up with geopolitical tensions and too much competition from China (think Japan in 2010 w/ rare earth and South Korea with THAAD but even before) and so what do they do?

They MOVE their production base slowly out of China into where? Well, for South Korea, it was Vietnam.

Samsung Electronics moved into Vietnam in the early 2000s to the point now more than 50% of their stuff is exported out of Vietnam. But not only. Many other Korean stuff.

Also Japanese etc. So what you see in the telecom here is not CHINESE PHONES but KOREAN PHONES.

The second wave of course is Chinese outward FDI themselves and also increasingly EUROPEANS.

Anyway, let's talk about phones.

For phones, the key thing I want to show here is that while Vietnam exports have grown a lot, over time, the IMPORTS of that have DECLINED.

And they have declined everywhere. People that look at China all day long think Vietnam only trades with China.

No, Vietnam is a relatively big trader for its small economic size so it TRADES WITH MANY ECONOMIES, the US and also South Korea etc.

Long story short here is that Vietnam is importing less of inputs while exporting more and that tells you that overtime supply chains are DEEPENING THERE FOR THAT ITEM. And it's not transhipment.

But what's RISING in imports FROM EVERYONE? WELL, capital intensive stuff. Vietnam is importing a lot of machinery etc from EVERYWHERE.

Note that it imports a lot from South Korea and Japan, Taiwan etc as well as China.

Read 6 tweets

Trinh

@Trinhnomics

Oct 15

Did you know that Vietnam's Q3 GDP grew 8.2%YoY and Q2 was 8%? It is one of the few countries in Asia where manufacturing share of GDP is rising even as Chinese imports flood the market. Why?

“In contrast to other countries that are stuck in political paralysis, Vietnam has moved very swiftly to secure lower tariffs and reform its economy to increase productivity and competitiveness,” @Trinhnomics , a senior economist at Natixis SA, said. “This has allowed Vietnam to emerge as a winner under Trump 2.0 despite high tariffs because it’s favored as a foreign direct investment destination for those wanting to diversify away from worsening US-China tensions.”

bloomberg.com/news/articles/…

Look at manufacturing across Asia and what do you see? Its down for India, Malaysia, the Philippines, Thailand, Indonesia.

But not Vietnam. It's up. The fact of the matter is Vietnam faces a widening trade deficit with China but at the same time it has turned that into an overall trade surplus, which means that Vietnam value add has risen over time.

And you can see it clearly in its manufacturing share of GDP or global market share. Has been slowly steady climb.

This year, in 2025 manufacturing output surged 9.92% in the first nine months of 2025 from a year earlier, with around 77% of companies surveyed by the National Statistics Office saying export orders were higher or at the same level, a sign that US buyers are shrugging off the tariff hit for now.

What is Vietnam doing right? Well, first, the most important thing is that it wants manufacturing above all else. Vietnamese people need formal jobs and by prioritizing that, Vietnam is now focusing on the next leg of development, which is how to ADD MORE VALUE.

Blink and you will miss the biggest reform story of Asia. Vietnam literally redrew its map & made one of the biggest structural reforms in decades.

Read 4 tweets

Trinh

@Trinhnomics

Oct 13

Rare earth is in the news again. Of course it is not rare, just that you gotta dig deep and then obvs process it. That entire process is polluting, costly and the output itself doesn't yield a lot.

That's how China has captured the market. It's willing to do polluting working and basically sells more not a lot. But having cornered that market, it also sees it as leverage, which it has used since 2010 (with Japan). The weaponization of supply chain is what we call it.

The free market economics of it makes sense for people to just leave it to China to do rare earth & then focus on the more market profitable business. Until, well, dun, dun dun.

So how should a firm or government view rare earth? Should you go and pay HIGHER price than what the Chinese rare earths are going for to then secure resilience of supply chain?

Most say, well, "Nah." That is a costly move because well, others will outcompete you with cheaper Chinese inputs while you go dig and refine your rare-earth magnets. Not an economically worthwhile endeavor.

But not everyone has taken that decision. Here is a story of a company that didn't: General Motors.

Here I summarize the great reporting of the WSJ Jon Emont and Christopher Otts.

As you know, we have known this issue for a long time & Japan knew about it since 2010. So the Japanese usually have about 1 year of this stockpile, just in case. Not the Americans.

The car industry is pretty dependent on rare-earth magnets. GM decided that Covid shocks, which left it with semiconductor shortage, that it should secure non-Chinese rare earth magnets.

This sort of decision takes years to bear fruit so it is one with risks. Why? Well, your competitors can buy cheaper Chinese rare earth while you are trying to get more expensive non-Chinese.

wsj.com/business/autos…

Read 7 tweets

Trinh

@Trinhnomics

Oct 13

Here we go, as I'll go on TV soon with @JoumannaTV to discuss data, let's take a look at China September trade data that just came out.

September exports rose 8.3%YoY in USD and imports increased 7.4%YoY.

Year-to-date, exports grew 6.1% while imports declined -1.1%YoY.

By destination, China exports to the US fell -16.9% but to Asia rising rapidly.

Exports to India rose 12.9% and India deficit with China is accelerating, with imports not just intermediates for production but also final consumer goods.

Shipment to ASEAN rose 14.7% with fastest growth to Thailand and Vietnam (+22.5% and 22.3%, respectively). The sharp increase of shipment reflect supply chain diversification but also rising imports for domestic demand in ASEAN that also poses challenges to domestic industries.

Exports to the EU rose 8.2% with shipment to Germany increasing +10.5%.

Interestingly, China exports to Russia has fallen this year by -11.3% as Russia puts up curbs to some Chinese exports.

China trade surplus in September:
#1 EU 22.9
#2 USA 22.8bn
#3 ASEAN 17.2bn
#4 India 10.3bn

Read 7 tweets

Trinh

@Trinhnomics

Sep 16

Should the US drop quarterly earnings? Well, the UK doesn't require it and neither does the EU.

Is it a controversial idea? Many people think it's a good idea to ditch it, including BlacRock CEO Larry Fink.

Fact: Hillary Clinton is also not a fan of quarterly earnings requirement.

It's one of the reforms people think will reduce shorterm-ism that is rather bipartisan.
ft.com/content/d5d463…

Here is Hilary Clinton going off against quarterly earnings.

Interesting that they got only quotes in that article of people thinking it is a terrible idea to get rid of it.

A lot of people think getting rid of it is a good idea.

Btw, companies can still report quarterly earnings. The SEC is saying you don't have to if you don't want to in proposing it.

European companies report quarterly earnings. Some don't. It's the optionality that's key.

theguardian.com/business/us-mo…

You can watch Hillary's actual speech. She's against quarterly earnings.

Many people are. Quarterlyism capitalism.

c-span.org/program/campai…

Read 4 tweets

Trinh

@Trinhnomics

Aug 26

https://twitter.com/ThePrintIndia/status/1960211274694005159

Despite the 50% tariffs imposed by Trump, India's future is more trade & not less & why tariffs will need to go down.

Here we go, a thread.

https://twitter.com/ThePrintIndia/status/1960211274694005159

From winning the Trump trade war, India is now the US President’s biggest target. The Trump administration imposed a 25% tariff on India. To add insult to injury, Trump announced another 25% tariff, effective tomorrow, on the grounds that India imports crude oil from Russia.

Indian goods bound for the US will now face tariff rates similar to China’s if we include the Trump 1.0 tariffs, making any China+1 strategy in India less competitive for US markets, and relative to Southeast countries, which for the most part face tariff rates of about 20 per cent.

Will the additional 25% tariff stick? While Russia’s war with Ukraine isn’t going to end by Wednesday, the secondary Trump tariff is likely temporary. Therefore, the question is not whether India will be able to bring the 50% back down to at least 25%, but when.

Read 12 tweets

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