HANOI – Chinese President Xi Jinping began a significant diplomatic tour of Southeast Asia on Monday, using the opportunity to position China as a pillar of stability amidst ongoing trade friction with the United States. His visit comes as the U.S., under successive administrations, has grappled with how to address its trade imbalance with China, employing tariffs and other measures to protect American industries.

While President Trump initiated a series of tariffs, some of which have seen adjustments, substantial duties remain on chinese imports, impacting the world’s second-largest economy. These tariffs, which at one point reached 45 percent, are a point of contention.

In a joint editorial published by Vietnamese and Chinese media, Xi Jinping underscored his stance:
There are no winners in a trade war, or a tariff war.
He further emphasized the need for both nations to
resolutely safeguard the multilateral trading system, stable global industrial and supply chains, and an open and cooperative international habitat.

Nguyen Khac Giang, a visiting fellow at Singapore’s ISEAS–yusof Ishak Institute, noted that Xi’s visit allows China to project itself as a
responsible superpower,
notably in contrast to the perceived unpredictability of U.S. trade policy.This positioning coudl resonate with many U.S. allies in the region that are keen on hedging their bets.

A Warm Welcome in Hanoi

Xi Jinping’s arrival in Hanoi was marked by a ceremonial welcome,with Vietnam’s President Luong Cuong receiving him on the tarmac. According to Nguyen Thanh trung, a professor of Vietnamese studies at Fulbright University Vietnam, such a reception is
an honor not often extended to foreign dignitaries.
The welcome included a drum performance and the waving of Chinese and Communist Party flags.

The visit, though likely planned in advance, gains increased importance because of the ongoing trade tensions between China and the U.S. it presents an avenue for Beijing to reinforce regional alliances and identify strategies to mitigate the impact of U.S.-imposed trade barriers. For U.S. businesses, this means watching how these relationships evolve and adapting their own supply chains accordingly.

Commitment to Peaceful Growth

During his stay in Hanoi, Xi met with Vietnam’s Communist Party General Secretary To Lam, emphasizing the shared commitment to peaceful development between the two nations. He stated that their partnership contributes to
stability and certainty to the global stage.
This is particularly significant in the context of the South China Sea disputes, where both countries have overlapping claims.

Meetings with Vietnam’s Prime Minister Pham Minh Chinh also took place, resulting in the signing of several memorandums of understanding, the details of which remain undisclosed. However, according to Nhan dan, the official mouthpiece of vietnam’s Communist Party, china and Vietnam plan to expedite an $8 billion railway project that was initially approved in February. This project underscores the growing economic ties between the two nations and their commitment to infrastructure development.

Political Messaging and Regional Implications

Huong Le-Thu from the International Crisis Group emphasizes the political undertones of the visit,noting that it signals the strategic importance of Southeast Asia to China.
The timing of the visit sends a clear political message, signaling Southeast Asia’s importance to China.
The U.S. tariffs create uncertainty among Southeast Asian nations, raising concerns about potential disruptions to their economic growth, which is a key factor for the region’s stability.

Vietnam has successfully navigated its relationships with both the U.S. and China. While maintaining a communist, one-party system akin to China, it has also cultivated strong ties with the U.S. In a notable diplomatic feat in 2023, Vietnam hosted both U.S. President Joe Biden and chinese President Xi Jinping. Moreover, Vietnam elevated its diplomatic relations with the U.S. to the same level as those with china and Russia.

Economic Dynamics and Trade War Fallout

In 2024, trade between China and Vietnam experienced a surge of 14.6 percent, solidifying China’s position as Vietnam’s largest trading partner. This growth underscores the increasing economic interdependence between the two countries.

Vietnam has also benefited from businesses seeking alternatives to China,attracting companies looking to diversify their supply chains.However, as Giang points out, the escalating trade war places vietnam in a
precarious situation,
with the U.S. potentially viewing it as a conduit for Chinese goods. Prior to a temporary 90-day tariff pause, Vietnam faced a 46 percent tariff imposed by the U.S.,highlighting the risks it faces amid the ongoing trade disputes. The U.S. has been increasing scrutiny on goods entering from Vietnam to ensure they are not simply Chinese goods being re-exported to avoid tariffs.

Navigating Territorial Disputes

Despite their robust trade relations, China and Vietnam have unresolved territorial disputes in the South China Sea. While there have been confrontations between Vietnam and China’s coast guard, Vietnam generally avoids publicizing these incidents. This delicate balancing act is key to maintaining stability in the region.

Future Engagements

Following his visit to Vietnam, Xi Jinping is scheduled to continue his diplomatic tour with visits to Malaysia and Cambodia. These engagements underscore China’s commitment to strengthening its ties with Southeast asian nations and promoting regional cooperation.

Impact on U.S. Businesses and Consumers

The dynamics between China and Southeast Asian nations have direct implications for U.S. businesses and consumers. The trade war has led to increased costs for some goods,as tariffs are often passed on to consumers. Businesses with supply chains reliant on China have had to consider diversifying to countries like Vietnam, which can present both opportunities and challenges.

Such as, a U.S. clothing retailer that previously sourced all its products from China might now split its production between China and Vietnam to mitigate the impact of tariffs and reduce reliance on a single source. This diversification could lead to changes in product costs, quality, and lead times.

Potential Scenarios and Future Outlook

Several scenarios could unfold in the coming months:

• The U.S.and China could reach a comprehensive trade agreement, reducing or eliminating tariffs and easing trade tensions.
• The trade war could escalate, with further tariffs and restrictions imposed by both sides.
• The current situation could persist, with ongoing trade friction and uncertainty.

Each of these scenarios would have different implications for U.S. businesses, consumers, and the global economy.