US share of Vietnam exports growing

By Phuong Anh   February 16, 2024 | 03:24 am PT
US share of Vietnam exports growing
Jeongmin Seong, a partner with management consulting firm McKinsey Global Institute. Photo courtesy of the institute
The U.S.’s share of Vietnam’s exports is growing, especially of laptops and smartphones, and the country is considered by investors as a potential global manufacturing hub, an analyst has said.

Some 20% of Vietnam’s exports went to the U.S. in 2017, but that had increased to 30% by 2022.

That makes the U.S. the biggest buyer of Vietnamese goods, Jeongmin Seong, a partner at management consulting firm McKinsey Global Institute, told VnExpress in an interview.

China’s share of U.S. manufactured goods imports fell from 24% to 15% between 2017 and 2023. The drop was largest in electronics.

China’s share of U.S. laptop and smartphone imports fell in both 2022 and 2023, and Vietnam is now exporting more of those products to the U.S.

Vietnam’s goods trade stands at around 180% of GDP, one of the highest levels in the world and up from 100% in 2010.

This is 70 to 100 percentage points higher than that of Korea, Germany and the other ASEAN economies, indicating that Vietnam’s integration into cross-border global value chains is deepening, Seong said.

Investment into Vietnam has been coming from countries across the geographic and geopolitical spectrum, he said.

Investment by U.S. companies surged to $22 billion in 2022 as against a pre-Covid average of around $3 billion.

As of October Chinese companies had invested $11 billion in 2023 as against the pre-pandemic average of less than $2 billion a year.

More than 80% of the investments are going into electronics components and semiconductor manufacturing, and he said this growing investment attests to Vietnam’s potential as a high-tech manufacturing base.

Since they face uncertainties in 2024, Vietnamese companies should consider shifting supply chains and diversifying production locations or end markets, he added.

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