China's Xi Jinping visits Vietnam amid U.S. trade tensions

Summary

Marketplace Morning Report: China's Xi Jinping Visits Vietnam Amid U.S. Trade Tensions Release Date: April 14, 2025

In this episode of Marketplace Morning Report, host Luke Wilson delves into the escalating trade tensions between the United States and China, spotlighting Chinese President Xi Jinping's strategic visit to Vietnam. The episode comprehensively explores the implications of recent U.S. tariffs on Vietnam and Cambodia, market reactions across Asia and Europe, and significant developments in the UK-China economic relationship.

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1. Xi Jinping's Strategic Visit to Vietnam

Timestamp: 00:13

China's President Xi Jinping commenced a pivotal three-nation tour with his arrival in Hanoi, Vietnam's capital. This visit marks the first leg of his journey, which will extend to Malaysia and Cambodia. The timing is critical, as both Vietnam and Cambodia are currently grappling with some of the highest U.S. tariffs—46% and 49%, respectively.

Host 1 introduces the context:

"China looks for closer ties with its neighbors to counter U.S. tariffs."
(00:01)

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2. Impact of U.S. Tariffs on Vietnam and Cambodia

Timestamp: 00:13 - 00:35

Vietnam and Cambodia have been significantly affected by recent U.S. tariffs, which have intensified trade tensions in the region. These tariffs target key exports from these Southeast Asian nations, complicating their economic landscapes and forcing them to navigate the pressures exerted by both the U.S. and China.

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3. Insights from Adam Sitkoff on Trade Dynamics

Timestamp: 00:33 - 03:13

Adam Sitkoff, Executive Director of the American Chamber of Commerce in Vietnam, provides an in-depth analysis of the current trade environment.

Economic Whiplash and Business Uncertainty
Sitkoff describes the ongoing tariff saga as "the art of the repeal instead of the art of the deal," highlighting the unpredictable nature of U.S. trade policies under the Trump administration. He emphasizes the challenges businesses face in making informed decisions amidst such volatility.

"Donald Trump is unpredictable and disruptive. For business people, it's hard for them to make decisions."
(00:52)

China’s Proposition to Vietnam
President Xi is portrayed as presenting a stable alternative to the erratic U.S. stance. By reiterating that a trade war yields no victors and advocating for protectionism's drawbacks, Xi aims to strengthen economic ties with Vietnam.

"China's a major market for Vietnam's agricultural products and Vietnam imports a lot of raw materials from China for the many factories that drive exports to the US."
(01:41)

Uncertainty Over Electronics Tariffs
The temporary halt on U.S. tariffs for semiconductors and electronic goods has introduced ambiguity. Sitkoff underscores the necessity for clarity, noting that approximately a quarter of China's exports to the U.S. could be exempt under these changes.

"I would like to see fewer barriers and more free trade because that's what I think raises standard of livings around the world."
(02:40)

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4. Market Reactions to Tariff Adjustments

Timestamp: 03:19 - 06:25

Following the announcement of tariff exemptions on electronics and semiconductors, Asian markets experienced a notable rebound. Key indices such as the Hang Seng and Nikkei closed higher, propelled by gains in the technology sector.

BBC's Suranjana Tiwari Reports:

"Shares in Foxconn, Apple's largest iPhone maker, gained around 4%. And South Korea's Samsung Electronics... gained 2%."
(03:30)

However, the optimism is tempered by President Trump’s indication of potential future levies, including planned tariffs on semiconductors within the next week.

European Market Positivity: The Stoxx 600 index in Europe climbed over 2%, with tech firms like the Dutch chipmaker ASML surging more than 3%. Conversely, Sony announced a price hike for its PlayStation consoles by approximately 25% in several regions, citing economic uncertainty.

"Japanese electronics giant Sony says it will increase the price of its PlayStation consoles by about 25% in several regions, including Europe."
(04:08)

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5. UK-China Relations and the Scunthorpe Steel Plant Takeover

Timestamp: 04:17 - 06:25

In a significant move reflecting the fraught UK-China economic relations, the British government intervened to take control of the Scunthorpe steel plant, previously owned by China's Jing Ye Group. This decision came amid fears that the plant was on the verge of closure, potentially jeopardizing the livelihoods of approximately 3,000 employees.

Emergency Government Action: British lawmakers held an urgent session to grant the government authority to seize the facility, aiming to secure necessary raw materials to keep operations afloat.

BBC's Harry Farley Explains:

"British steel must be the canary in the coal mine for Chinese investment in UK critical infrastructure."
(05:49)

Government and Industry Perspectives: Business Secretary Jonathan Reynolds refrained from accusing Jing Ye Group of sabotage but highlighted instability caused by the cessation and sale of raw material supplies. Laura Lambie of Rathbones Investment Management expressed skepticism about attracting new private investments to British Steel, citing high raw material costs, substantial energy expenses, and import duties.

"It's difficult to see how the UK at the moment, as it stands, can be competitive with its overseas competitors in producing steel that can rank along with the other countries in the world."
(06:03)

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6. Conclusion

Timestamp: 06:25 - 06:40

As the episode concludes, the broader implications of these trade tensions and strategic moves by China and the UK are underscored. The intertwined fates of global markets, regional economies, and international relations continue to evolve in response to proactive and reactive measures by key global players.

Host Sign-Off:

"That's all from us this morning. I'm Luke Wilson with the Marketplace Morning Report from the BBC World Service."
(06:25)

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This episode of Marketplace Morning Report offers a nuanced exploration of the current geopolitical trade landscape, emphasizing the strategic maneuvers by China in Southeast Asia, the volatile nature of U.S. tariffs, and significant shifts in European and British markets. Through expert insights and real-time market analysis, listeners gain a comprehensive understanding of the factors shaping today's global economy.

Transcript

[Host 1]

China looks for closer ties with its.

[Luke Wilson]

Neighbors to counter U.S. tariffs. Live from the BBC World Service, this.

[Host 1]

Is the Marketplace Morning Report.

[Luke Wilson]

I'm Luke Wilson in for Liana Byrne.

[Host 1]

Good morning.

[Luke Wilson]

China's President Xi Jinping has arrived in the Vietnamese capital of Hanoi, the first leg of a three nation visit that will also take him to Malaysia and Cambodia. All three countries have been targeted by recent US Tariffs, with Vietnam and Cambodia facing some of the highest at 46 and 49, respectively.

[Host 1]

Adam Sitkoff is executive director of the.

[Luke Wilson]

American Chamber of Commerce in Vietnam and joins me now from Hanoi.

[Host 1]

Hi, Adam.

[Adam Sitkoff]

Hi, Luke. Thanks for having me.

[Luke Wilson]

Last time we spoke to you about.

[Host 1]

A week or so ago, that 90 day pause on tariffs hadn't come in yet. Obviously it now has.

[Luke Wilson]

Since we last spoke to you, how have things changed?

[Adam Sitkoff]

Well, you know, a lot of people are calling this the art of the repeal instead of the art of the deal. And that's because what's happening, the whiplash we all experience, it just reinforces the view that Donald Trump is unpredictable and disruptive. And for business people, it's hard for them to make decisions. I guess what you could say is that the one thing we know is that American people are unlikely to be making shoes and iPhones in places like Texas or North Carolina anytime soon. There's not going to be an immediate shift away from Vietnam as most firms are going to wait and see how the situation evolves before making any major moves.

[Host 1]

And President Xi in Vietnam as we speak, what opportunities are there there for China? What do you think the president is looking to get out of this visit?

[Adam Sitkoff]

Well, President Xi arrived here earlier today and he's really trying to present himself as a stable alternative to an erratic and disruptive Donald Trump. So upon his arrival in Hanoi, he reiterated kind of Beijing's line that a trade war and tariff war produces no winner and protectionism will lead nowhere. And I think he's here to kind of tell Vietnam and the other places he's going, hey, hang with us and, and hang tough and we'll all get through this. China's a major market for Vietnam's agricultural products and Vietnam imports a lot of raw materials from China for the many factories that drive exports to the US.

[Host 1]

And you mentioned electronics. There a bit of uncertainty over the weekend. We've had this kind of temporary pause in US Tariffs on semiconductor as electronic goods. And then a suggestion that that temporary pause might be obviously very much that temporary.

[Luke Wilson]

How important is sort of clarity in.

[Host 1]

That area to Vietnam and that part of the world?

[Adam Sitkoff]

I think it's very important. I'll give you an example. About a quarter of China's total exports to the US Would be exempt because of that, waiving the electronics from those tariffs. There is some confusion. I mean, the present and some of his folks obviously said in the past hours that, well, actually they're not really being exempted those products, they're just being moved into a different tariff bucket. But I would like to see fewer barriers and more free trade because that's what I think raises standard of livings around the world.

[Host 1]

Adam Sitkoff, head of the American Chamber of Commerce in Vietnam, thanks very much.

[Luke Wilson]

For joining us on Marketplace.

[Adam Sitkoff]

Thanks for having me.

[Host 1]

Asian markets rebounded after that tariff exemption for electronics and semiconductors, with the Hang.

[Luke Wilson]

Seng and Nikkei both closing higher, driven by tech firms.

[Host 1]

Here's the BBC's Suranjana Tiwari.

[Suranjana Tiwari]

Shares in Foxconn, Apple's largest iPhone maker, gained around 4%. And South Korea's Samsung Electronics, which supplies Apple and is also the second ranked smartphone vendor in the US market, gained 2%. But any gains will be limited given that President Donald Trump warned levies were still likely at some point and that he plans to impose tariffs on semiconductors over the next week.

[Host 1]

The BBC's Suranjana Tiwari and let's get some more numbers. Europe has followed Asia in reacting positively to the latest tariff changes. The Stoxx 600 is currently up more.

[Luke Wilson]

Than 2%, with tech firms also driving that rally.

[Host 1]

The Dutch chipmaker ASML is currently up more than 3%. But Japanese electronics giant Sony says it will increase the price of its PlayStation.

[Luke Wilson]

5 console by about 25% in several regions, including Europe. Due to economic uncertainty. The British government has taken control of a Chinese owned steel plant in the UK that was said to be days away from closing. The British steel plant in Scunthorpe in the north of England used to be government owned and employs around 3,000 people.

[Host 1]

It was privatised nearly 40 years ago.

[Luke Wilson]

And is now owned by China's Jing Ye Group. Over the weekend, British lawmakers held an emergency session to give the government the.

[Host 1]

Power to take over the site.

[Luke Wilson]

It's now racing to get the raw materials needed to keep the blast furnace running.

[Host 1]

Here's the BBC's Harry Farley.

[Harry Farley]

There is a shipment of coal sitting at Immingham docks, 25 miles east of Scunthorpe. Civil servants and British Steel staff are trying to secure it and bring it to the plant. Dozens of other businesses have offered help and their raw materials. The business secretary, Jonathan Reynolds, declined to accuse British Steel's Chinese owners of sabotage. But when they not only stopped ordering raw materials but began selling off existing supplies, he decided to take over. The episode is likely to raise questions about the government's approach to Beijing, including whether parts of the Chinese state should join Russia and Iran on an enhanced tier. In a register of foreign lobbyists, Luke Depolford of the Inter Parliamentary alliance on China, which monitors Beijing's human rights record, told the BBC, British steel must be the canary in the coal mine for Chinese investment in UK critical infrastructure.

[Host 1]

The Chinese government says it hopes the.

[Luke Wilson]

UK Will treat Chinese businesses fairly and impartially. Laura Lambie from Rathbones Investment Management says even though the government has stepped in, British steel isn't likely to attract more private investment.

[Laura Lambie]

We've got the price of raw materials, we've got huge energy costs associated in the UK on top of that, we have import duties. So it's difficult to see how the UK at the moment, as it stands, can be competitive with its overseas competitors in producing steel that can rank along with the other countries in the world.

[Host 1]

Laura Lambie there. That's all from us this morning. I'm Luke Wilson with the Marketplace Morning Report from the BBC World Service.

[Janelli Espinal]

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