Governments increasingly use tariffs to pursue economic decoupling from targeted countries, yet the extent to which trade and supply-chain links persist through third countries remains unclear. Measuring these links is difficult: firms have incentives to conceal the rerouting of goods to evade tariffs, and a good’s country of export does not reveal where its inputs were produced. Using linked Vietnamese customs, production, and ownership records, we study Chinese production reaching the US through Vietnam during the US–China trade war. We provide the first transaction-level decomposition into rerouted Chinese goods and Chinese inputs used in Vietnamese production. Between 2018 and 2022, US imports from Vietnam increased by $78.3 billion. Together, the input and rerouting channels accounted for 27.1% of this increase, with the input channel contributing 16.6% and the rerouting channel contributing 10.5%. To isolate tariff effects from broader trends, we exploit variation in the timing and intensity of tariff increases across products and Vietnam’s source countries. We find that US tariffs on Chinese goods raised the rerouted and imported-content shares relative to other source countries. Rerouting increased across ownership groups, whereas Chinese input use rose primarily among firms owned by investors from mainland China or Hong Kong, including incumbent and new exporters. The growth in these channels offset 13% of the decline in China’s direct share of US imports. Vietnam’s growing intermediary role therefore reflected both tariff circumvention and expanded Vietnamese production using Chinese inputs, showing how third countries can sustain supply-chain links even as direct trade declines.

This paper studies how foreign ownership and profit repatriation shape Vietnam's welfare gains from the 2017-2019 US-China trade war. Using Vietnamese enterprise surveys covering all registered firms, I show that the production response came almost entirely from foreign-owned manufacturers: in sectors more exposed to US tariffs on Chinese goods, foreign-owned firms expanded employment and assets, while domestic firms contracted. I then estimate a quantitative trade model in which domestic and foreign-owned firms differ in productivity, fixed costs of sourcing and exporting, and the share of profits retained locally. A foreign demand shock matching the trade war's export response raises Vietnam's real expenditure by 7.95 percent, with two-thirds of the gain coming from higher real labor income. Profit repatriation matters surprisingly little: moving from full repatriation to full local retention raises the gain only from 7.94 to 8.10 percent, because retained foreign profits sustain less productive domestic firms and dampen real wage gains.

This paper studies how liberalizing outward foreign direct investments affects manufacturers’ engagement in global production and their domestic workers’ labor market outcomes. Focusing on a liberalization policy in 2001 by the government of Taiwan that allowed 122 electronic products to be produced in China, we estimate its effect on Taiwanese electronic manufacturers and their domestic workers. Employing a matched difference-in-differences strategy, we find that the manufacturers targeted by the policy were on average 10% more likely to invest in China relative to the non-targeted ones. Correspondingly, the domestic incumbent workers of the targeted manufacturers were on average more likely to change their jobs, remain employed for fewer years, and have lower wages in subsequent years relative to those employed by the non-targeted ones. The worker-level effects of the policy exhibited substantial heterogeneity across the initial wage distribution, with top-decile workers being less affected and the remaining workers experiencing average losses.