BAC NINH Vietnam – No country on earth has benefited from President Trump's trade deal with China more than Vietnam.
The country's factories have swollen with orders as US tariffs prompt companies to consider making their products in China. Now, several large technology companies want to consolidate their manufacturing operations in Vietnam and lift the ambitions of a nation that is already on its way to becoming a power producer of smartphones and other advanced things.
But first, Vietnam must be better at making the little plastic houses on your earbuds.
"Vietnam cannot compare with China," Thang said. "When we buy materials, it's 5, 10 percent more expensive than China already." And the Vietnamese market is too small, he said, to entice plastic manufacturers to set up plants here.
Dealers for the US and China meet in Shanghai this week to try to find a way forward in resolving their blue-collar war. But for some companies, highlighted by what now appears to be is a definitive darkening of America's relationship with China, and the appeal of working in the world's second-largest economy may already be sore for good. With smartphones, video game consoles and other consumer favorites that are next on Trump's tariff list, gadget manufacturers in particular are feeling pressure to find new low-wage sites to create or complete their products.
Apple has lived in Vietnam and India as it intensifies its search for ways to diversify the supply chain. Nintendo has accelerated a shift in production of its Switch console to Vietnam from China, according to Panjiva, a supply chain research company. Taiwanese electronic behemoth Foxconn, a major collector of iPhones, said in January that it had acquired land use rights in Vietnam and had pumped $ 200 million into an Indian subsidiary. Other Taiwanese and Chinese partners to Apple have indicated that they are considering conducting operations in Vietnam as well.
Yet this nation of almost 100 million people is not in the process of replacing China as a manufacturing center overnight. Soil here can be expensive, and factories and warehouses ready for use are in short supply. Recruiting enough trained workers and managers is another potential challenge .
"It is definitely expanding Vietnam's capabilities," said Frederick R. Burke, CEO of Ho Chi Minh City for the law firm Baker McKenzie. Although the country's workforce is expanding by a million people a year, he added, "people are already talking about labor shortages."
Vietnam also does not have large galaxies of companies that hire out special components, parts and materials that manufacturers can call at in China.
Tran Thu Thuy said that "of course" she would like to work with Apple someday. Ms. Thuy's company, HTMP, makes metal molds that factories use to make plastic and molded parts. She gestured toward a nearby MacBook. One day, she said, the HTMP might be able to create the shapes of portable metal bodies of metal. But she knows the company needs to improve in many ways before that day can come.
"It's a long list," she said.
Vietnam is already a colossus in producing shoes, clothing and other types of labor-intensive goods, after it has long since started tipping away from the giant northern neighbor.
Nike and Adidas are now stocking close to half of their running shoes in Vietnam . As factories have emerged, the Vietnamese government has promised to improve roads, ports and power plants. Hanoi has also entered into agreements with governments around the world to reduce tariffs, including an agreement reached last month with the EU.
The Trump administration has not failed to notice that import duties have shifted global trade in Vietnam's direction. The Treasury has put Hanoi on a watch list to manipulate the value of the Vietnamese currency, dong, to help exporters. Last month, Trump suggested that Vietnam might be the next target for criminal charges, calling the country "almost the single worst abuser of all."
In response, the Vietnamese government said it wanted to mutually benefit trade ties with the United States, and it highlighted its efforts to punish exporters who illegally labeled their goods as "Made in Vietnam" to evade US taxes.
Yet even Mr. Trump's celebration seems unlikely to reverse the wider shifts that make North Vietnam an important hub for electronics. Many of the huge factory complexes that stretch across the horizon in long, palm-fringed rows are here in no small way thanks to one company.
More than a decade ago, Samsung Electronics, the South Korean titan, established a facility in Bac Ninh to reduce its dependence on China. The move was prescient. Costs in China continued to rise, and Samsung sales there faded after Beijing boycotted South Korean products over Seoul's embrace of a US missile defense system in 2017.
Samsung has since closed everything except one of its smartphone facilities its in China. It now collects about half of the handsets it sells worldwide in Vietnam. Samsung's subsidiaries in the country, which employs around 100,000 people, accounted for nearly a third of the company's $ 220 billion sales last year.
A Samsung spokeswoman said about 90 percent of sales involved goods shipped from Vietnam to other countries. This means that Samsung alone accounted for a quarter of Vietnam's exports in 2018, even if it did not fully capture the company's impact on the broader economy. Samsung's success in Vietnam helped convince many of its South Korean suppliers to stay here as well.
"When you are a big company and move to a place, everything follows you," said Filippo Bortoletti, Hanoi's deputy manager at the business consulting firm Dezan Shira.
Some Vietnamese business owners say that the blessings are mixed. Foreign giants, they say, come to Vietnam and work largely with suppliers they already use elsewhere, leaving little room in their supply chain for local upstarts.
Samsung has 35 Vietnamese suppliers, the spokeswoman said. Apple declined to comment.
When Samsung first established itself in the country, it purchased some of the metal fittings used on the assembly lines from a local company, Vietnam Precision Mechanical Service & Trading, or VPMS. But then several of Samsung's South Korean partners began to enter the country, and after a year, Samsung and VPMS stopped working, said Nguyen Xuan Hoang, one of the founders of the Vietnamese company.
Price and quality were not the problem, Hoang said, about the hissing and clanging of machines at his factory near Bac Ninh. The problem was scale: Samsung needed many more inventory than VPMS could supply.
Vu Tien Cuong's company, Fitek, manufactures industrial equipment for Samsung, Canon and other large companies around Bac Ninh. He acknowledged that most Vietnamese suppliers had quality and productivity problems that prevented them from winning business from multinational companies. But he believes that the root problem is experience, not lack of money or knowledge.
"Day by day," said Cuong, Vietnam's supplier base is improving and "growing up ."
Nguyen Thi Hue, 28, knows a thing or two about growing up at work. For a long time after starting her own company in 2015, Hue worked 16-hour days juggling a day job for another company while getting her new venture off the ground.
Her startup, Anofa, specializes in metal surface coatings. It has partnered with suppliers for foreign brands such as the Korean Korean electronics manufacturer LG and Italian motorcycle manufacturer Ducati.
"We really look forward" to Apple expanding its supply chain in Vietnam, said Nguyen Van Huan, Ms. Hue's husband, who is also her lawyer .
Anofa has invested in new machines to try to win more business from foreign customers. "They have higher standards and requirements," Huan said.
"We can meet them," said Hue, brilliant .
Chau Doan contributed reporting.