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Just passing through? The US-China trade war and reconfiguration of global value chains through Vietnam

Author

Listed:
  • Zou, Tao
  • Gong, Yundan

Abstract

We examine how the 2018-19 US-China trade war reconfigured global value chains (GVCs) through Vietnam using firm-to-firm transaction records on cross-border trade and domestic sourcing. We find that exposure to US tariffs on Chinese goods led firms in Vietnam to increase imports from China and exports to the US, with both transshipment and value-added processing contributing along distinct timelines. Tracing domestic supply-chain responses within Vietnam, we show that US tariff hikes on China also increased local intermediate sourcing, but a substantial share of this expansion embodied Chinese intermediate inputs. The results provide firm-level evidence that trade-war-driven relocation of GVCs to Vietnam stimulated local processing activity while deepening Chinese supplychain linkages in the third country.

Suggested Citation

  • Zou, Tao & Gong, Yundan, 2026. "Just passing through? The US-China trade war and reconfiguration of global value chains through Vietnam," KCG Working Papers 38, Kiel Centre for Globalization (KCG), revised 2026.
    • Handle: RePEc:zbw:kcgwps:342501
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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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