This Country Now Has the Largest Trade Surplus With the US

Vietnam has quietly leapfrogged China to claim the biggest trade surplus with the US. Federal data show Vietnam's surplus hit $114 billion in the first half of the year, surpassing China, Mexico, and Taiwan—despite having an economy roughly a quarter the size of Mexico's. The shift is closely tied to President Trump's tariff campaign against China, which pushed companies to move production next door, the Wall Street Journal reports. Chinese imports now face an effective tariff of 23.2%, versus 6.5% for Vietnamese goods.

Apple, Nike, Lululemon, and a wave of smaller firms have reoriented supply chains to Vietnam, driving US imports from the country up 40% year-over-year to $123 billion in six months. Vietnam's trade surplus with the US overtook China's in the second quarter of last year, becoming second only to Mexico, Reuters reports. The Journal notes that Vietnam is only the fifth-largest exporter of goods to the US, but it imports a lot less from the US than other nations. While some in Washington allege Chinese goods are being routed through Vietnam, US business groups say the surge mainly reflects genuine investment in Vietnamese factories, especially in electronics.