Share this page!

Trinh Profile picture
Twitter logo
28 Oct, 9 tweets, 2 min read
Firms move to Vietnam as a China labor cost arbitrage trade. Tariffs + another cost to the equation. Trump doesn’t care about textile moving from China to VN. He wanted access for American services (financials) & limit China rise in tech & vertical integration of value chain.
People write these stories all the time about how firms shifting to Vietnam is a failure of Trump policy. US wages are expensive. No way it’s competitive in labor intensive manufacturing. Americans in trade negotiations want champions to thrive & that’s high tech & services
I met Obama negotiators for TPP & basically US admin people. Same idea. TPP is all about market access as for the Americans they don’t want Asian style FTAs (tariff reduction only & non tariff barriers up) but US style & that means investment & that means US banks/services etc.
What are the Americans gaining in China? Services. US firms are coming in & that is what they want. China to open up services & areas they are good at.

No bats an eye if Vietnam gains more. In fact, the US wants Vietnam to develop & be stronger.
Whether it is Trump or Biden come next wk, policy the same. The Americans want to open access for areas they are competitive in.

Labour intensive manufacturing isn’t one that they care about, Trump, Biden or Obama.

Vietnam GDP per capital is 3k max.
Look, here is what the US want & basically expand access to its comparative advantage in agri, high-tech, & services.

It moved past labor intensive. Doesn’t care. Look at sectors where the Americans pile in & care about, either China or Vietnam.
In Vietnam, they want to sell more food, wine etc to Vietnam (recent pork deal example) & also services like education & banking & airplanes etc.

The US does not compete with Vietnam. Does not. Vietnam competes w/ similar economies, not the richest in the world.
These articles are good at bashing Trump but miss key economic points about comparative advantage & trade & investment policy.

The US was never going for Chinese textile moving to the US. Never. Ever.
I can’t believe I have to write this thread but here I am.

It is ridiculous to even think that firms moving from China to Vietnam is a failure of Trump policy.

Obama wanted that with TPP. Firms moved before Trump to VN from China. Trump pushed firms to move more.

• • •

Missing some Tweet in this thread? You can try to force a refresh
　

Keep Current with Trinh

Trinh Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @Trinhnomics

Trinh Profile picture
30 Oct
Good morning! It's Friday, last night the US reported +33.1% QoQ SaaR growth from -31.4%. As we know this number is useless in the fact that Q2 & Q3 were unique in their seasonal sense & can't be extrapolated/annualized to think that Q3 will persist.

So? %YoY GDP rose -2.9%YoY Image
Taking into account the -9%YoY of Q2 & +0.3% of Q1 then we have an average three quarters growth of -3.9%YoY.

In other words, Q4 will determine whether the US will contract by only a small single digit or as consensus forecast of -4%.
Jobless claims are falling a bit (talking about stock of continuing claims & existing home sales pretty strong on a %YoY). That said, the question is how needy the economy of more stimulus (2nd fiscal package not passed) & whether states will suppress activities & dampen growth. Image
Read 6 tweets
Trinh Profile picture
29 Oct
Are polls biased? Here is the map from Fivethirtyeight that thought Hillary chance of winning was 66.9% in 2016 & I circled the states where the polls were wrong & that's 46 electoral votes that decided the 2016 election. Image
Today, @NateSilver538 gives Trump only 11% chance to win & Biden 88% chance to win according to his many simulations. Image
These are the states that Trump flipped in 2016 (Democrats in 2012 election) & that's six states & the Democrats DID NOT FLIP ANY.

What about 2020? They put Trump only 11% chance to win. Is it true? Image
Read 6 tweets
Trinh Profile picture
29 Oct
According to polls, here is what the electoral map looks like:

*Biden solid 259 so he needs to flip 11 to win so polls showing his hurdle to win much lower than Trump
*Obvs polls don't vote, people do so we'll find out if pollsters are doing a good job
*Trump has only solid 125 Image
So for Trump, it's clear he needs to take ALL THE TOSS-UP esp Texas, Florida, Georgia & North Carolina.

He still needs to paint that map pretty red w/ Ohio & Pennsylvania being key (polls moving towards his direction).

Still, he needs to take either Arizona or the lake ones. Image
Here I assume he takes Arizona but it could be Michigan although polls aren't in his favor for Michigan.

Either way, I am very very excited in the coming days for polls/voting patterns.

May be a "sure" thing & hurdle is perceived to be "lower" for Biden, all based on polls. Image
Read 5 tweets
Trinh Profile picture
29 Oct
Asia recovery > Europe for the simple reason that here in Asia we are done w/ lock-downs (that was my call & I think a correct one). Look at India, Indonesia & the Philippines when they had high cases & suppression measures weren't intense because they simply cannot afford it.
India had a lock-down from 25 March to end of May & that resulted in a -24%YoY contraction of GDP.

Okay, but then what happened when it started easing? Cases SPIKED & deaths but it didn't continue w/ the lock-down b/c just simply barely afforded the 1st.

So? It lived w/ it. Image
So what happened to Covid-19 cases & deaths? Well, it rose in Q3 but then declined sharply in Q4.

And India achieved this without a lock-down. Meaning, the 1st lock-down kept cases down but delayed the spread anyway to Q3 & so w/o one, cases still fell. Image
Read 14 tweets
Trinh Profile picture
28 Oct
Ready? Here we go: a comparison of the USA, Europe & the UK. New cases per millions. Look at that. Europe went from doing so well in the summer to massive explosion of cases.

US cases remained steady in comparison, still high. US suppression also not as severe & state dependent
How did Europe get here? Very simple, it had a pretty relaxing summer & judging from my friends going about holidaying w/o masks in groups basking in that beautiful Mediterrean sea while Americans bicker over masks etc, I knew, I knew this was coming & it's gonnna be explosive.
Btw, Europe had a much more severe lock-down that the US in Q2 2020. So that had social & economic costs while still plenty of lives lost anyway.

After the severe lock-down, it had a summer that was nice, sunny days, normalization etc.

Only to be here in Q4. Explosive cases.
Read 4 tweets
Trinh Profile picture
27 Oct
Ready? UNCTAD investment trends monitor & shows the following:
*FDI down -49% in first half 2020, biggest declines in Europe and the US
*There were negative inflows to European economies & flows to the US fell to USD69bn or -56%
*Flows to Africa fell -28%, LatAm -25% & Asia -12%.
Let's look by country of H1 2020 vs H1 2019:

Best is Germany of +15%, followed by Mexico of +5% & China of -4%.
Developing Asia is the most resilient, mostly because of China & specifically flows to HK. By sector, it was mostly e-commerce & ICT. Korea fell by -34%; Southeast Asia fell w/ Vietnam falling the least of -16% to 6.8bn. The Philippines & Thailand had growth but from a low base.
Read 7 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!

Like this author's thread?

Get email notifications when new thread is out from this Author!

Check out other threads from this Author!

Read all threads by @Trinhnomics