(Yicai Global) Oct. 11 -- Toolmaker Great Star Industrial plans to invest USD300 million to start a Vietnamese unit in an attempt to avoid the impact of the ongoing trade tiff between China and the United States.

The Hangzhou-based firm will set up the new company via its American subsidiary, it said in a statement yesterday. It will register the firm in Hai Phong and use it as an overseas production base and to organize global distribution.

The base will be an important part of global production plans, which will encompass existing plants in China, America and Europe to maximize regional resources and make the company more competitive internationally, it added.

Great Star brings in 65 percent of its sales from American exports, and the disputes between its biggest market and home country cause concerns for future business, the statement said.

China and the US have been at loggerheads over trade tariffs for the majority of this year. On Sept. 24, America implemented the third wave of new tariffs by hitting USD200 billion worth of Chinese goods with a 10 percent duty, to increase to 25 percent at the start of next year.

China hit back the same day, putting a 5 percent or 10 percent rate on USD60 billion worth of American goods. It now has tariffs worth USD110 billion targeting the US exclusively, while American tariffs against China tally USD250 billion.

Editor: James Boynton