"Caught in a cross fire, Vietnam is currently being squeezed between two economic superpowers -- the US and China. While it needs free access to the American market to keep its export-powered growth story going, the country also heavily relies on Chinese imports that span everything from yarn to chemicals and machines for assembly lines."

Caught in a cross fire, Vietnam is currently being squeezed between two economic superpowers -- the US and China. While it needs free access to the American market to keep its export-powered growth story going, the country also heavily relies on Chinese imports that span everything from yarn to chemicals and machines for assembly lines.

Vietnam’s relations with China have always ranged from unpredictable to turbulent. Its overreliance on trade makes it particularly vulnerable to geopolitical risks. This slender, S-shaped nation has long attracted the attention of foreign powers jockeying for regional influence. However, it is likely to fast lose ground if dragged into the trade war or embroiled in hostilities with China. Despite rough patches in their relationship, China, which supported Vietnam during its war with the US five decades ago, ensures that Vietnam remains within Beijing’s orbit of influence and promotes trade and investment in Vietnam. The country regularly promotes trade and investment in Vietnam. On its part, the US sends warships to visit the Southeast Asian country to participate in joint activities with the Vietnam People’s Navy.

Vietnam takes a neutral stance

In this clash between the two giants, Vietnam aims to remain neutral. To stay on an even keel, senior Vietnamese officials always pay a visit to Beijing whenever they visit Washington. The country knows how to maintain its independence without being gratuitously provocative.

However, territorial tensions between Vietnam and China have been escalating for the last four months. In mid-2014, China positioned an exploration oil rig off Vietnam, triggering violent anti-China protests. Then, Chinese competitors flooded across the border to set up factories, too. Investment from China and Hong Kong surged, from $3.4 billion in 2014 to $11.9 billion in 2019, on hopes of taking advantage of the proposed agreement.

Twin typhoons strike Vietnam

The trade war is attracting more Chinese companies to Vietnam putting the country at risk of new duties on its exports. Currently, twin typhoons are bearing down on the country as the fortunes of its Hong Le Trading Company are being inescapably exposed to two opposing forces. Its new fabric unit imports yarn from China which is further spooled into Chinese-made cotton-spinning machines to produce bolts of cream-colored fabric. These bundles of cloth are then trucked to Hong Le’s dye unit, Hao Hanh Trading Co. Chinese dye chemicals are used to treat this fabric before it’s sent to factories throughout Vietnam to be cut into shirts and dresses destined for clothing racks in the U.S