The "survival" story of Vietnamese businesses behind sparkling Christmas li

For many years, holiday lights were usually made almost exclusively in China, but the rising U.S. tariffs on Chinese goods pushed many buyers to pick up goods elsewhere, including Vietnam.

According to US customs data, there is one country that clearly benefits from the US-China trade war, which is Vietnam: Shipments of Christmas lights across the sea from Vietnam have more than doubled in 10 months. at the beginning of the year compared to the same period in 2018. At the same time, the US lamp imports from China have decreased by 49%.

Looking deeper into the data and discussing it with trade experts, there is a complex story behind those glowing lights.

Christmas lights are coming to America in a pattern that is becoming more familiar because it is on the US tariff list: Chinese suppliers are looking to remove the "Made in China" label. To evade penalties, use neighboring countries like Vietnam to move goods across borders, re-label them, and ship them to the US.

Vietnam has long attracted a lot of investment and legitimate foreign business - and did well before President Donald Trump started rocking global supply chains. However, the trade war has increased the risk of illegal goods trading, bringing Vietnam to the spotlight.

Deborah Elms, executive director of the Asia Trade Center in Singapore, said: “The Chinese are very good at making low-value and bulk goods with certain piracy tips that can easily replication. Chinese businesses are doing a lot of ways to avoid huge tariffs that can eclipse margins, ”she said.

It's a vividly illustrated conclusion in Vietnam, where a row of three consecutive houses in Hanoi's Old Quarter is filled with Christmas lights at this time of year.

"There are some local companies that have brought materials and parts from China and assembled them into these lamps for sale," said Nguyen Thi Ha, a 34-year-old shop owner in Hang Ma.

"They don't want to make them themselves because they will spend more money than importing parts from China to assemble," she said.

"The trade war pressure means a lot of Chinese products are flooding the market this year," said some shop owners along Hang Ma.

What you are looking for: best xmas lights

In May, the Trump administration imposed a 25% tax on Christmas lights from China, up from 10% earlier.

For Mr. Au Anh Tuan, the Customs Supervision and Control Department at the General Department of Vietnam Customs, curbing the flow of illegal goods is a vital struggle. By October, the Vietnamese police discovered about 14 cases of export with fake labels, spending alone this year.

"We have been working with the Ministry of Planning and Investment to review all FDI from China and Hong Kong," he said in a November interview in Hanoi. Quoc entering Vietnam grew three digits in 2019, data until November showed.

They looked at the value of the investments - especially the size of the factories and the technology the companies use - to determine if these investors are aiming for just one, Tuan said. set up a place to assemble all the parts they bring in from China, whether products are subject to U.S. tariffs, or find out investors who are just trying. evade penalties from America.

Some big name companies like Kyocera Corp, Sharp Corp and Nintendo have invested in Vietnam since the trade war began, and many others are considering. Capital investment in Vietnam is on track to reach $ 35 billion this year.

That success also had to trade off Vietnam's merchandise surplus with the US rose to $ 46.3 billion in the first 10 months of 2019 - up 39% year-on-year - making Vietnam a target for the White House. The US has previously taxed more than 400% on some steel products from Vietnam.

Meanwhile, businesses on the other side of the world are still troubled by changing supply chains they haven't adapted - including the Christmas lights.

Frank Skinner, marketing director at Georgia-based WinterType Corp, a company that imports Christmas lights and holiday decorations, said: “It takes a few years for companies to get past things. this. For companies like us, which have a very large seasonal demand curve, that's much more difficult. ”