China’s Xi Bolsters Southeast Asia Ties as Trump Weighs Semiconductor Tariffs
China’s President, Xi Jinping, has embarked on a diplomatic tour to bolster ties with Southeast Asia amid an escalating trade war with the US that has caused turmoil to the global economy.
Xi’s tour includes Vietnam, Malaysia and Cambodia, three major export-relying countries that enjoy growing trade and investment ties with China. Meanwhile, the US President, Donald Trump, is considering tariffs on imported semiconductors, a move that will likely affect the Chinese semiconductor sector.
Xi in Southeast Asia
On Monday, the Chinese leader arrived in Vietnam, according to CNN. He will visit Malaysia and Cambodia from Tuesday to Friday, in an attempt to cast China as a responsible and reliable partner in contrast to the US.
Vietnam and Cambodia took the hardest blows from Trump’s tariffs, with 46% and 49% respectively. However, Trump has paused his reciprocal tariffs on most countries for 90 days, focusing his trade war on Beijing.
The Southeast Asian countries try to tread carefully to maintain balanced relations with the US and China to avoid getting caught in the crossfire between the world’s two largest economies.
According to Chinese customs data, the Association of Southeast Asian Nations (ASEAN) has surpassed the US and the European Union (EU) as China’s largest export market since 2023.
Strengthening Ties
In recent years, Chinese investments in Vietnam have recorded a notable surge as more manufacturers move their supply chains out of China to benefit from lower labor costs and avoid US tariffs. Vietnam has become China’s largest trade partner in Southeast Asia, as trade volume between both countries nearly doubled between 2017 and 2024.
During Xi’s visit to Hanoi, the two countries are expected to bolster ties by signing about 40 agreements across various sectors, including railways, agriculture, and digital and green economy, Reuters reported citing Vietnam’s Deputy Prime Minister, Bui Thanh Son.
Courting Vietnam
The Chinese leader called for strengthening bilateral ties on multiple fronts, warning that there are no winners in trade war or tariff war, and that protectionism will lead nowhere.
In an editorial published in Vietnamese and Chinese official media, Xi wrote: “Our two countries should resolutely safeguard the multilateral trading system, stable global industrial and supply chains, and open and cooperative international environment.”
Moreover, Xi urged the two countries to manage their territorial disputes in the South China Sea. “We should properly manage differences and safeguard peace and stability in our region. The successful delimitation of our boundaries on land and in the Beibu Gulf demonstrates that with vision, we are fully capable of properly settling maritime issues through consultation and negotiation,” he noted.
US-China Tariff War
A tariff war has escalated between the US and China against the backdrop of Trump’s reciprocal tariffs on all imported goods to the US. The US President imposed a basic 10% tariff on all countries, with hikes on selected countries including China.
The world’s two largest economies engaged in tit-for-tat tariff surges, resulting in the US imposing a 145% tariff on China, while Beijing imposed 125% levies on American goods, saying that it would “fight to the end” if the US “insists on provoking a tariff war or trade war,” BBC reported.
After the US paused tariffs on a host of countries for 90 days, excluding China, Beijing called on Trump to cancel his reciprocal tariffs. “We urge the US to take a big step to correct its mistakes, completely cancel the wrong practice of ‘reciprocal tariffs’ and return to the right path of mutual respect,” the Chinese Commerce Ministry said in a statement.
Tariffs Coming to Semiconductors
On Sunday, Trump said he would announce the tariff rate on imported semiconductors over the next week, according to Reuters. He added that this move aims to boost the US semiconductor sector. “We want to make our chips and semiconductors and other things in our country,” the US President told reporters aboard Air Force One.
He also announced a national security trade probe into semiconductors. “We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations,” he posted on Truth Social.
Although the White House on Friday announced an exemption on smartphones, computers and other electronic products, including those made in China, the US Commerce Secretary, Howard Lutnick, announced on Sunday that Chinese critical technology products and semiconductors would face separate new tariffs within the next two months.
He explained that smartphones and electronic products will be included in a “special focus-type of tariffs” alongside the tariffs targeting semiconductors and pharmaceuticals. These new levies will be separate from Trump’s reciprocal tariffs.
