Amid tariff war, why Xi Jinping’s visit to Vietnam, Malaysia and Cambodia matters

Xi also visited Vietnam and Malaysia earlier this week. While the visit was planned before Trump announced his “Liberation Day” tariffs, it nonetheless was an opportune moment to shore up goodwill in the neighbourhood.

Another sign of China’s attempted outreach in its neighbourhood was a somewhat rare “Central Conference on Work Relating to Neighboring Countries” held on April 8 and 9. Attended by key party leaders, it “emphasised the need to focus on building a community with a shared future with neighboring countries”.

Many countries in Southeast Asia were hit with high tariffs by the US. Notably, they also enjoy friendly relations with China, especially when it comes to trade and economy. Here is a brief look at where these stand, and why China is keen to build on them.

1. 01

   China and Vietnam

   TIES: The two countries share ideological and political commonalities, both being one-party Communist states. However, they disagree on some notable security issues, including in the South China Sea, where both countries have built islands to solidify their territorial claims.

   According to the Carnegie Endowment’s 2024 ‘China Through a Southeast Asian Lens’ compendium, the people of Vietnam have generally viewed the US as a preferred partner over China, making it an outlier in the region alongside the Philippines.

   TRADE: Vietnam has strong trade ties with the US and China, but in different ways. In 2024, the value of goods Vietnam imported from China stood at $144 billion. The same year, the US imported goods worth $136 billion from Vietnam. The size of trade has grown similarly in recent years. For instance, in 2023, imports from Vietnam to the US stood at $114 billion and those from China to Vietnam at $111 billion.

   Vietnam is considered a major industrial and assembly hub, which imports from China and exports to the US market at a similar scale, Reuters reported. “In the first three months of this year Hanoi imported goods worth about $30 billion from Beijing while its exports to Washington amounted to $31.4 billion,” it said.

   It was among the hardest hit by US tariffs, which stood at 46% before the rollback on April 9. This was in part because it was believed that China might use Vietnam as a channel to divert its goods to the US. Given Vietnam’s dependence on the US market, it has quickly moved towards negotiations.

   Several reports have also noted Vietnam’s experience and ability to dehyphenate and maintain good relationships with the US and China, being the only country that received both Xi and then US President Joe Biden for official visits in 2023. It capitalised on the last US-China tariff war in 2018, on the back of which it saw an economic boom, with big manufacturers setting up base there.

2. 02

   China and Malaysia

   TIES: Malaysian Prime Minister Anwar Ibrahim said China was Malaysia’s most significant trading partner and continued to be a “rational, strong and reliable” ally. Despite differences in the South China Sea, bilateral ties have generally been stable. Ibrahim, in particular, has been seen as friendly to China and the country has been preferred over the US.

   TRADE: China holds a much larger presence in the Malaysian market, exporting $101.46 billion worth of goods in 2024, compared to the United States’ $27.7 billion. Chinese imported $110.57 billion worth of goods from Malaysia, while the country’s exports to the US stood at $52.5 billion in 2024.

   Malaysia is home to several projects of the Belt and Road Initiative, China’s flagship infrastructure funding scheme in developing nations. Just last year, Chinese Premier Li Qiang attended the groundbreaking ceremony for a terminal of the $10 billion East Coast Rail Link project. However, development has been slow amid the high costs and negotiations for readjustment — something seen in other BRI projects elsewhere, too.

   Hit with 24% tariffs, Malaysia has also quickly reached out to the US. In public comments, officials have pointed to the importance of its semiconductor and electronics sectors. A BBC report said that last year, China imported $18 billion worth of chips from Malaysia. Crucial for manufacturing electronics, but limited in the spread of their manufacturing, semiconductors are extremely valuable today. For instance, they are used in iPhones built in China that are then sold in the US. In 2024, Malaysia shipped $16.2 billion worth of chips to the US, accounting for nearly 20% of all US semiconductor imports, according to Reuters.

   But, given the even higher tariffs on China, Malaysia could be preferable to US companies for importing certain goods.

3. 03

   China and Cambodia

   TIES: Cambodia’s ruling dispensation enjoys very positive ties with China, despite China’s support for the Khmer Rouge communist regime that oversaw a genocide in the mid-1970s. This has been chalked up to Cambodia’s need for aid and China’s readiness to provide it, alongside a common suspicion of the West-led, liberal-democratic order. China has also funded infrastructure projects like the $1.7 billion Funan Techo canal, which would connect the capital, Phnom Penh, with the Gulf of Thailand.

   TRADE: China has been Cambodia’s largest trading partner for 13 consecutive years, with total trade in 2024 reaching $17.83 billion. China largely exports goods to Cambodia. On the other hand, US-Cambodia trade was around $13 billion in 2024, with the US importing goods worth $12.7 billion.

   Cambodia is a major textile manufacturer. It saw a 49% tariff rate imposed initially. The Trump administration’s rationale was that, given the lopsided trade deficit with the US, these tariffs could disincentivise imports.

   Further, countries would be pressured to reduce their tariffs on US products. However, economists have questioned this approach because it is not as if a nation like Cambodia imposes an equal 49% tariff rate on US goods.

   The US simplistically arrived at that rate to “balance bilateral trade deficits between the US and each of our trading partners.” But Cambodia’s exports outweigh its imports, not necessarily because of trade manipulation on its part, but rather its large workforce which makes labour costs cheap and its goods attractive to the US. American goods, meanwhile, may largely be beyond the purchasing power of many Cambodians. To negotiate, Cambodia has offered to lower its tariffs on some US items.

Two major themes emerge from examining these relationships.

FIRST, that no matter their physical proximity to China or the goodwill in their ties, the sheer economic power that the US possesses means no country can afford to turn completely towards China.

SECOND, China also holds some sway in the region and will leverage it to project strength in the coming days. There are already some concerns, such as China offloading its goods here at a considerably lower cost (what is called “dumping”) because of its current difficulties with the US market. China developing deeper ties in the region could thus help, with Southeast Asia not being a substitute for the US but rather a cushion to soften the tariff blow.

Commenting on the visit on Monday, Trump told reporters, “I don’t blame China; I don’t blame Vietnam. That’s a lovely meeting. Meeting like, trying to figure out, ‘how do we screw the United States of America?””