Last year Vietnam surpassed the Philippines to become the fourth biggest Southeast Asian market for American goods, according to latest data from the U.S. Department of Commerce.
Shipments from the U.S. to Vietnam hit $10.2 billion, up more than four times compared to 2007, approaching the number recorded by Thailand. Singapore and Malaysia remained at the top.
Vietnam mostly imported machinery and crude materials for manufacturing last year. Besides, American agricultural products, especially soybean, also made major inroads.
Vietnam has been one of the top suppliers of a wide range of goods for the U.S. While trade relations between the two countries have mostly been discussed with a focus on exports from Vietnam, it should be noted that a large number of American businesses also view Vietnam as an increasingly important market.
Bilateral trade has been expected to benefit from the Trans-Pacific Partnership (TPP), an ambitious trade pact connecting Vietnam, the U.S. and other 10 countries.
But what is going to happen now that the Trump administration has officially pulled the U.S. out of the deal? Experts say the demise of the pact could hurt businesses in both Vietnam and the U.S.
“The TPP would have lowered 18,000 tariffs for U.S. companies to export their goods to those 11 markets,” said Karen Gerwitz, president of World Trade Center Denver, Colorado.
Experts say without joining the TPP, the U.S. will have to negotiate on new bilateral trade deals with Vietnam and some other Southeast Asian countries, a process that will require a lot of time and effort.
As China and the European Union have been trying to establish footholds in this fast-growing region, the clock is now ticking for the U.S.