Does Vietnam’s Soaring U.S. Trade Deficit Make It a Bad Actor?
In the first half of 2026, Vietnam became the largest U.S. trade-deficit partner, with a deficit of $126 billion, a 45 percent increase from the same period in 2025. Electronics accounted for 87 percent of the growth in Vietnamese exports, driven by global tech companies rather than Chinese firms. Exports of apparel, footwear, and toys, sectors associated with Chinese investment, barely changed.
Why it matters: This matters for the trade policy theme because it indicates that tariffs on Vietnam would rest on a misreading of the trade data.