Potential risks for exports to US

16-Jul-2019 Intellasia | The Saigon Times | 6:02 AM Print This Post

Vietnam’s exports to the United States have recently soared, bringing about opportunities to both gain more market shares in the states and potential risks.

Under the impact of the US-China trade war, Chinese goods are subject to high US tariffs, leaving room for enterprises from other countries, including Vietnam, to penetrate the US market. At present, Chinese leather products, shoes and handbags are not yet put in the group of commodities subject to a 25 percent US tariff. However, Diep Thanh Kiet, vice chair of the Vietnam Leather, Shoe and Handbag Association (Lefaso), said many big international footwear companies have contacted Lefaso members for a shift of US-bound orders from China. Vietnam currently exports $4 billion worth of footwear to the US after China, with some $15 billion.

The woodwork industry, which generates export revenue of more than $8 billion for Vietnam, has also experienced visible growth in exports to the US The latest report by Forest Trends shows that woodwork exports to the US have increased strongly, especially since mid-2018 when the US-China trade tension flared up.

Last year, Vietnam’s woodwork exports to the US reached $3.6 billion, up nearly 30 percent from 2017. In the first four months of this year, the figure is nearly $1.4 billion, 1.4 times higher than the year-earlier period. To Xuan Phuc, an analyst from Forest Trends, has forecast that if this growth momentum continues, Vietnam will become the seventh largest woodwork exporter to the states this year, rising from its current 12th position.

The footwear and woodwork are two of the many industries of Vietnam which can have an opportunity to penetrate further into the US market. According to the calculation by Associate Professor and Dr To Trung Thanh from the National Economics University, the goods overlapping (the similarity in the export structures of countries) of Vietnam and China in the US grew fast in the period 2010-2018. The overall overlapping index increased from 14.51 in 2000-2002 to 42.02 in 2010-2018. The indexes for manufactured and processed exports in the respective periods are 19.25 and 40.43.

A report by the general Statistical Office shows that the US is the largest market for Vietnam’s exports in the first five months of this year, generating an export revenue of $22.6 billion, up 28 percent year-on-year. Some exports with the highest growth are smart phones and parts, with 109.2 percent; electronics, computers and parts 58.4 percent; and textiles and garments 9.8 percent.

Exports from Vietnam to the states have increased rapidly since 2010. The total exports in 2018 reached $47.53 billion, more than triple the figure in 2010 (US$14 billion).

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Category: Economy, Vietnam

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