‘No winners’ in a trade war, says China’s Xi as he heads to Vietnam on charm offensive

Xi Jinping expected to present China as reliable partner in contrast to US, which imposed – then suspended – tariffs over 40% on some countries.

The Chinese president, Xi Jinping, warned there would be “no winners” in a trade war and that protectionism “leads nowhere”, as he began a three-nation trip to south-east Asia, starting in Vietnam on Monday.

Xi’s tour, which started in Hanoi, also includes rare visits to Malaysia and Cambodia and will seek to strengthen ties with China’s closest neighbours amid a trade war that has sent shock waves through global markets.

Writing in an article published in Vietnam’s Nhân Dân newspaper on Monday, Xi urged Vietnam to “resolutely safeguard the multilateral trading system, stable global industrial and supply chains, and open and cooperative international environment”, Beijing’s Xinhua news agency said.

He added that a “trade war and tariff war will produce no winner, and protectionism will lead nowhere”.

It is expected Xi’s visit will seek to present China as a reliable partner, in contrast to Washington, which imposed – then suspended – tariffs of more than 40% on some countries in south-east Asia, an export-reliant region.

Officials in Vietnam, a manufacturing powerhouse, were shocked when the country was hit with a tariff of 46%, even after various efforts to appease the Trump administration. The tariff, which has been paused, threatens to devastate the country’s ambitious economic growth plan.

Xi’s visit was reportedly planned prior to Trump’s tariff announcement. During meetings Vietnam and China will sign about 40 agreements across different sectors, Vietnam’s deputy prime minister, Bùi Thanh Sơn, said on Saturday. It is expected this will include cooperation to develop Vietnam’s railway network.

Vietnam’s leader, Tô Lâm, wrote in an article published in state media on Monday that Hanoi wanted to boost cooperation in defence, security and infrastructure, especially on rail links.

Xi’s visit will probably form part of an effort to prevent economic encirclement by the US and in the region, said Dr Nguyen Khac Giang, a visiting fellow at the Vietnam studies programme of the ISEAS-Yusof Ishak Institute, who cited reports that Washington would prioritise trade negotiations with countries such as Vietnam, Japan, South Korea and India.

For Vietnam, Giang added, Xi’s visit presented “a risk and an opportunity”.

Vietnam, and many other south-east Asian countries, are trying to maintain a delicate balancing act between the US and China. The US is Vietnam’s main export market, with US exports accounting for 30% of Vietnam’s GDP. However, China is Vietnam’s top import source, which it relies on for raw materials and other supplies that will be used to produce exports destined for the US.

Vietnam has traditionally sought to avoid taking sides between the US and China and will want to avoid antagonising either party, especially as it tries to persuade Washington to lower tariffs.

Vietnam is vulnerable to Washington’s tariffs because its trade surplus with the US has grown rapidly over recent years to more than $123bn (£94bn), fuelled in part by companies relocating production to Vietnam to avoid tariffs imposed on China by the last Trump administration.

Hanoi is preparing to crack down on Chinese goods being shipped from its territory to the US, in an effort to appease Washington, according to a Reuters report, and to tighten controls on sensitive exports to China. It has also made other concessions, including offering to remove all tariffs on US imports and promising to buy more US goods.

Cambodia and Malaysia, which face tariffs of 49% and 24% respectively, are also seeking to negotiate with Donald Trump, while China has previously vowed to “fight until the end” if the US continued to escalate the trade war.

Hanoi will want to avoid being seen as moving too close to Beijing during Xi’s visit, given the tension between China and Washington, said Giang, but he added that China may be able to offer a “life-saving opportunity for Vietnamese economy … at least in the short run”.

This could include a commitment from China not to export its excess capacity to Vietnam. Across many south-east Asian countries there is concern that tariffs imposed on China by the US will worsen a problem of cheap Chinese goods overwhelming domestic industries. China could also increase its imports from south-east Asia, including in areas such as agriculture.

A willingness to pursue peaceful solutions to the dispute in the South China Sea, where Beijing and several south-east Asian countries have overlapping claims, would also improve perceptions of China in the region, added Giang.

“Now we are viewing the US as a global disruptor – that presents China a golden opportunity to be a responsible stakeholder in the region. And if they can do so, I think more and more south-east Asian countries will eventually move closer to China,” Giang said.

By Rebecca Ratcliffe – The Guardian – April 14, 2025