As companies struggle to get going, is Vietnam throwing away trade war win?

More and more businesses are complaining about congested ports and roads, rocketing costs for land and labor, and regulations that aren’t being loosened fast enough

Vietnam is finding it’s hard to win a trade war even when businesses are trying to hand you victories. The Southeast Asian growth engine has a young and growing middle class, a horde of free-trade agreements, and a booming manufacturing industry. Businesses from Alphabet Inc’s Google to Crate & Barrel Holdings Inc. are lining up to invest in the country as supply chains migrate from neighboring China, which served as the world’s factory for the better part of two decades.

But Vietnam is starting to see expectations outrun reality. More and more businesses are complaining about congested ports and roads, rocketing costs for land and labor, and regulations that aren’t being loosened fast enough. Tapestry Inc, owner of the Coach and Kate Spade brands, has lamented insufficient infrastructure investment that’s left some containers stalled on the waters. Eclat Textile Co, a supplier to Nike Inc, says it needs to diversify beyond Vietnam, including to cheaper locations.

If Vietnam isn’t able to fast-track progress in closing its infrastructure gap, it risks losing its “mini-China” status that has drawn so many of Bain & Co.’s toy-supplier clients there since 2015, said Gerry Mattios, Bain’s Singapore-based vice president. Costs could outweigh the benefits, sending producers to the likes of Sri Lanka or Cambodia, he said..