China's Xi calls for stronger trade ties with Vietnam amid US tariff tensions

As trade tensions with the United States escalate, Chinese President Xi Jinping has embarked on a pivotal Southeast Asia tour, beginning in Vietnam, where he called for deeper economic cooperation to safeguard regional supply chains and bolster strategic ties.

Chinese President Xi Jinping, during his visit to Hanoi on Monday, emphasized the need for enhanced trade and supply chain cooperation with Vietnam. The visit marks the beginning of a three-nation tour across Southeast Asia and comes as China contends with 145% tariffs imposed by the United States. Concurrently, Vietnam is in negotiations to reduce a potential 46% U.S. tariff set to take effect in July, following the expiration of a global moratorium.

In an article published in Nhandan, the official newspaper of Vietnam’s Communist Party, Xi called for expanded collaboration between the two countries in trade, artificial intelligence, and the green economy. He also highlighted the importance of strengthening industrial and supply chain ties.

Amid mounting pressure from Washington, Vietnam has increased oversight of its trade with China to ensure compliance with origin rules for goods labeled “Made in Vietnam” and destined for the U.S. market. Vietnam, a key manufacturing and assembly hub in the region, relies heavily on imports from China while the U.S. remains its primary export destination.

According to Vietnam's customs data, the country imported approximately $30 billion worth of goods from China in the first quarter of 2025, while exports to the United States totaled $31.4 billion—demonstrating a consistent trade pattern linked to its economic positioning between the two major powers.

Focus on Infrastructure and Rail Connectivity

Xi’s April 14–15 visit to Vietnam, followed by trips to Malaysia and Cambodia through April 18, underscores China’s strategic focus on deepening regional ties. His return to Hanoi, just 18 months after his last visit, comes amid increased Chinese investment in Vietnam, driven in part by supply chain realignments initiated during the Trump-era tariffs.

Vietnamese Deputy Prime Minister Bui Thanh Son announced that approximately 40 agreements spanning various sectors are expected to be signed during the visit. Vietnam’s top leader, To Lam, highlighted Hanoi’s intent to bolster cooperation with Beijing in defense, security, and particularly infrastructure development—including railway projects.

Vietnam has agreed in principle to use Chinese loans for constructing new rail links between the two countries, a move aimed at enhancing bilateral trade and connectivity. However, no official loan agreements have been disclosed to date.

Additionally, China is seeking Vietnam’s endorsement for its COMAC aircraft, which have seen limited success abroad. On Sunday, Vietnam’s VietJet and COMAC signed a memorandum of understanding in Hanoi, with one COMAC C909 plane bearing VietJet and Chengdu Airlines branding already spotted at Hanoi’s international airport. Details of the agreement remain undisclosed, though reports suggest VietJet may lease two COMAC C909 aircraft operated by Chengdu Airlines for domestic routes.

Navigating Strategic Tensions

Despite growing economic interdependence, tensions between China and Vietnam persist, particularly concerning territorial disputes in the South China Sea. Vietnam’s recent concessions to the U.S.—including adopting Elon Musk’s Starlink satellite services and curbing certain Chinese imports due to concerns over origin labeling—may further strain ties with Beijing.

Vietnam has also introduced anti-dumping measures against several Chinese steel products and revoked a tax exemption for low-value imports to curb the influx of inexpensive Chinese goods.

Meanwhile, Cambodia and Malaysia—the other two countries on President Xi’s itinerary—are also facing U.S. tariffs of 49% and 24%, respectively, and are actively engaging with Washington to seek exemptions.

Copied