Tariffs: Stop Hey What’s That Sound?

We look at the Vietnam trade deficit and import mix in the context of the Top 15 trade deficits.

Apr 01, 2025

Who imported this jelly donut?!

We update the top 15 trade deficits on the way into the Liberation Day tariff news that is likely to set off a fresh round of debate, disinformation, and dysfunction.
We also look at the import product mix from Vietnam, a top 10 trade partner (exports + imports) that ranks #8 as a nation in total trade and #6 in total imports.
We frame the trade deficits as % of exports as a metric used by haters of deficits but who like a yardstick for relative “evil.” Many also simply toggle to the highest deficits in gross dollar terms.

The news from Trump on Liberation Day is expected to come after the market close on Wednesday. A lot of debate will ensue domestically and globally and notably within trade partners in formulating their response/retaliation. Then comes the retaliation to the retaliation. There has been nothing close to this in the postwar years (that would be WWII). The post-WWI experience with such tariff experiments did not go well.

Since we are looking at widespread chaos and policy differences, we thought Vietnam was relevant to the targeted trade deficit attacks that are coming. Vietnam has soared as a trading partner since Trump 1.0 as large swaths of low-cost imports just changed Asian addresses from China to Vietnam among other trade partners.

On that Vietnam and political chaos note, some lyrics travel well across time (Buffalo Springfield in For What It’s Worth):

There's something happening here
But what it is ain't exactly clear…
There's battle lines being drawn
Nobody's right if everybody's wrong…
Paranoia strikes deep
Into your life it will creep
It starts when you're always afraid
Step out of line, the men come and take you away…

On that pleasant note, the desire to set global trade on its ear and drive a trade war (or wars) will make for a lot of sorting out in coming days and weeks. The main “enemies” in this fight are the countries with the highest trade deficits. Trump has decided they are all ripping us off and are being subsidized by America. The desire of US corporations to make bigger profits using low-cost global sourcing and US consumers to buy goods for less is now being attacked by the GOP, the party of big business since the Gilded Age.

The above chart is just another twist on the idea that trade deficits are intrinsically bad. Since we don’t believe that at all (it depends on why there is a trade deficit), but it is a metric some use as a frame of reference. The ratio is “goods trade deficits divided by exports” and seeks to measure the “bad” (trade deficit) vs. “good” (exports).

We include it to highlight two major countries that show up in the top trade deficit stories– Vietnam and Ireland – that are not typically focal points of controversy. We also see Thailand, Taiwan, and Indonesia on the list and numerous other Asian nations. We will find out how the White House came out with their “Dirty 15” list tomorrow. We could be working on attacking Europe, North America, and much of Asia at this point. We would highlight Mexico and Canada did not make this list.

We already looked at the Ireland story and its massive base of Pharma imports in an earlier piece (see Tariffs: Enemies List 3-6-25). Tariffs on all those products would not be great for US health care costs when you are locking in on potential Medicaid cuts. Tricky business.

In the next chart we look at the Vietnam mix of imports. Trump will finally show up for the draft and have his first fight with the Vietnamese (his feet have healed). He is bolder this time around.

The above chart is self-explanatory and carries more than a few conspiracy theories that the exporters from Vietnam are rebadged China products on either transshipments or subsidiaries of China operations. We see both views tossed around, and we assume Vietnam will be on the “Dirty 15” as highlighted by the White House. Stay tuned.

Tariff and Trade links:

Tariffs are like a Box of Chocolates 4-1-25

Auto Tariffs: Questions to Ponder 3-28-25

Fed Gut Check, Tariff Reflux 3-22-25

Tariffs: Strange Week, Tactics Not the Point 3-15-25

Trade: Betty Ford Tariff Wing Open for Business 3-13-25

CPI Feb 2025: Relief Pitcher 3-12-25

Auto Suppliers: Trade Groups have a View, Does Washington Even Ask? 3-11-25

Tariffs: Enemies List 3-6-25

Happy War on Allies Day 3-4-25

Auto Tariffs: Japan, South Korea, and Germany Exposure 2-25-25

Mini Market Lookback: Tariffs + Geopolitics + Human Nature = Risk 2-22-25