Vietnam’s $5b plan to tamp down Trump’s tariff threats

Bloomberg

Vietnam’s campaign to tamp down the Trump administration’s trade gap ire has come to a coastal commune better known for growing dragon fruit along one-lane potholed roads.
The community could soon be home to a $5 billion liquefied natural gas project that would include an import terminal and gas-fired power plant and eventually import billions of dollars of US fuel into the country.
It’s being fast-tracked with the blessing of Prime Minister Nguyen Xuan Phuc as part of a push to buy American products in Vietnam, where the Communist government has embarked on a crash course in modern US politics.
“I’ve never seen the Vietnamese government move so quickly,” said John Rockhold, an engineer with 28 years’ experience shepherding infrastructure projects in Vietnam. He is country director of Energy Capital Vietnam, which is leading a consortium of companies backing the development on salt beds in southern Binh Thuan province. “I think they see LNG as a way of lowering the trade deficit the US has with Vietnam. There is a lot of pressure from the White House right now.”
Indeed, the nation’s leaders are doing all they can to avoid China’s fate after President Donald Trump in June described Vietnam as “almost the single worst abuser of everybody” when asked if he wanted to impose tariffs on the nation. US Trade Representative Robert Lighthizer “has a scoreboard: if you have a trade surplus with the US of over $10 billion, you are in the middle of his dart board,” said Ernest Bower, president of Fairfax, Virginia-based Bower Group Asia, which advises businesses on operating in Southeast Asia.
Under pressure from the US, Vietnam is also cracking down on the fake labeling of Chinese goods being routed through the Southeast Asian country to bypass Trump’s tariffs.
Vietnam has become perhaps Asia’s biggest beneficiary of the US-China trade war as companies including Nintendo Co and Alphabet Inc’s Google shift production to the country. So Vietnamese officials, from the politburo to local governments, are looking for ways to trim the nation’s trade surplus with the US, which hit $40 billion in 2018.
That gap totalled $30 billion in the first seven months of this year, 39 percent higher than in the same period last year, according to US Census Bureau data.
“If we buy more from the US, it will surely help boost our relationship with them,” said Mai Anh Tung, a government official in Binh Thuan province, where the LNG project involving companies such as General Electric Co, KBR Inc and Korea Gas is planned.

Coal, Engines
Vietnam’s Communist Party Secretary and President Nguyen Phu Trong is expected to visit the White House next month with a deal list for made-in-America products.
Think natural gas from Texas, coal from Pennsylvania and even aircraft engines —a shopping cart that could total billions of dollars. It’s no coincidence that many of these products come from regions that are important to Trump’s re-election hopes in 2020.
“They have hired trade advisers,” Bower said.
This isn’t the first time Trump has pressured Vietnam on trade. The US president prodded Vietnamese leaders to buy US military equipment during his 2017 visit to the country, reminding his hosts that he would face re-election. Vietnam, which until 2016 was barred from buying US military weapons systems, has received training from the US on navigating America’s procurement process, said Tuong Vu, a professor of political science at the University of Oregon.