Vietnam Should Have Seen This Tariff Hit Coming

The imposition of aggressive US tariffs has been greeted with a surplus of strong reactions, almost none of them good. Bewilderment and dismay are among the more sanitized responses from trading partners. To their great disappointment, Washington's friends haven't been spared, even those with whom it trades on very favorable terms. The investor class has given President Donald Trump's salvo, which significantly raises the chances of a global recession, a scornful rejoinder.

In the case of a few countries, let’s consider an additional response — one of sympathy. Vietnam ought to be near the top of the condolence list. It came late to the Southeast Asian export machine, but became one of the world's fastest-growing economies, and ties with the US have steadily warmed since the American-backed regime in the South fell to Communist forces 50 years ago. While still poor relative to Singapore, Malaysia and Thailand, Vietnam's leaders adopted large parts of the development model that proved a boon to much of the region. The government eased curbs on investment, welcomed supply chains, was attentive to infrastructure needs, and took steps to combat corruption. When the US sought to isolate China, the nation became a popular destination for manufacturing giants wanting an inexpensive location and a skilled labor force. It was a darling of the “China Plus One” crowd.