Vietnam climbed to the second spot behind China to become the second-biggest supplier to the US as per 2020 Global Imports Report by Jungle Scout, a leading data analyzing and consulting platform on Amazon.
Vietnam’s share of US imports growing faster than other countries
In its report, in the first half of 2020, Vietnam ranked second by share of US imports, accounting for 5.5 percent, climbed four places from 2015. This share is growing faster than any other country, increasing by 65 percent in the past five years. Meanwhile, the country’s total export to the US also rose by 72 percent over the same period.
While Vietnam’s share of US imports is still relatively small compared to China’s, Vietnam is the only trading partner, besides China, whose import share exceeds 5 percent.
According to US Trade Numbers, Vietnam’s trade with the US rose to US$46.43 billion through the first seven months of 2020, an increase of 10.76 percent compared to the same period last year. Within which, the US recorded a rise in imports, but a fall in exports to Vietnam, with a trade deficit of US$34.77 billion.
Vietnam’s main export products to the US
In the first seven months of 2020, Vietnam’s main export to the US included:
- Cell phones and related equipment fell 8.07 percent compared to last year to US$6.95 billion;
- Furniture, parts rose 20.14 percent compared to last year to US$2.91 billion;
- Athletic, other textile shoes fell 9.66 percent compared to last year to US$1.76 billion;
- Seats, excluding barber, dental rose 30.14 percent compared to last year to US$1.49 billion; and
- Photo-sensitive semi-conductors, parts rose 112.09 percent compared to last year to US$1.42 billion.
Vietnamese competitiveness and China plus one production
While China still maintains a significant lead in export to the US (41 percent), its share of US imports has been shrinking as a result of the US-China trade war, and recently the COVID-19 pandemic.
In early 2020, as China’s production disrupted and dropped dramatically, countries in Southeast Asia such as Vietnam continued to ship to the US and saw positive year over year growth. Notably, Vietnam’s economy showed the highest sign of recovery from COVID-19 disruption, at 10.6 percent thanks to the country’s growing exports in the first half of 2020, as per the report.
Vietnam’s positive sign of recovery also shows through its increasingly important role in global supply chains. In the first half of 2020, Vietnam’s shipments to the US was over 311,000 compared to just 360,500 shipments for all of 2015. From January to September 2020, Vietnam’s total trade value reached US$388.4 billion, a year-on-year increase of 1.8 percent, with the US the largest importer of Vietnam’s products, followed by China and the EU.
Moving forward, Vietnam is working to address the growing trade deficit with the US and address concerns that it is profiting unfairly from the US-China trade war. In the first seven months of 2020, US exports to Vietnam reached US$5.83 billion; major exporting products include cotton, computer chips, civilian aircraft and parts, cell phones and related equipment, and oil.
With US-China relations on a downward trajectory, the China plus one strategy gives Vietnam an opportunity to strengthen its trading position with the US and attract more foreign investment.
In a recent announcement, the Ministry of Industry and Trade (MoIT) also emphasized its goals to bolster trade and industrial cooperation with the US. The government has promised to push for administrative reforms and complete required legislation to ensure a favorable and stable investment and business environment. It also reiterated its stance to enhance Vietnam’s prospects to become a post-COVID-19 China alternative.
(Source: https://www.vietnam-briefing.com/)
