For years, Vietnam and several south-east Asian neighbours seemed to have a winning growth formula. They followed the export-led path already trodden by the likes of China. They were big beneficiaries of the reordering of supply chains prompted by Covid and US tensions with Beijing, becoming part of “China plus one” strategies for US and other businesses seeking a second export manufacturing base. Now those policies have come back to bite them. When Donald Trump unveiled his “l(fā)iberation day” tariffs, some of the highest were the 46 per cent rate on Vietnam, and 49 per cent on Cambodia.

Though a big rise in US tariffs on China was expected, the hit to south-east Asian manufacturing was a surprise. Writing in the Financial Times, Peter Navarro, Trump’s trade adviser, made clear the White House wants to make countries such as Cambodia and Vietnam choose between the US and China, and “stop allowing China to evade US tariffs by trans-shipping exports through your countries”. Some Trump administration insiders insist China is their main target; other countries affected are collateral damage.

The damage, though, is substantial — and far from one-sided. Major US companies including Apple, Nike and Intel have manufacturing or suppliers in Vietnam, following a strategy they believed made sound business and political sense. While efforts to improve domestic capabilities in some high-end manufacturing may have merit for supply chain resilience, moreover, the economics of reshoring T-shirt making to the US is questionable.