HÀ NỘI — Recent strategic adjustments to Canada’s trade policies, aimed at dismantling internal trade barriers, are poised to significantly amplify the flow of Vietnamese exports into the Canadian market. This development presents a compelling opportunity for international buyers sourcing from Vietnam.
According to Trần Thu Quỳnh, the astute trade counselor and head of the Việt Nam Trade Office in Canada, a pivotal change involves the mutual recognition of imports across Canadian provinces and territories. This streamlining of trade processes directly translates to reduced costs and enhanced efficiency for imported goods, making Vietnamese products more competitive in the Canadian market.
Explosive growth in key export sectors
The year 2024 witnessed remarkable growth across several key Vietnamese export sectors:
- Machinery and equipment: Reactor machinery and equipment exports surged by an impressive 90%, solidifying its position as the second-largest export item from Vietnam to Canada.
- Electronics: Computer exports also experienced a substantial 35% increase, reflecting Vietnam’s growing prowess in the technology sector.
- Consumer goods: Textiles (+10%), footwear (+16%), seafood (+22%), and wood products (+22%) all demonstrated robust growth, indicating strong consumer demand.
- Agricultural products: Cashew nuts (+21%), coffee (+16%), and fruits and vegetables (+44%) showcased Vietnam’s agricultural diversity and quality.
- Other notable increases: Confectionery (+30%), cereals (+16%), and pepper (+81%) further contributed to the overall export boom.
- Iron and steel: The imposition of tariffs on Chinese iron and steel by Canada led to a significant shift in sourcing, benefiting Vietnamese exporters. Common metals rose 25%, and iron and steel products rose 30%.
Unprecedented fourth-quarter export surge
A surprising surge in exports during the fourth quarter of 2024, typically a slow period for Canadian imports, was observed. Monthly exports from Vietnam to Canada increased by approximately $570-$590 million, representing a 20% average rise. This surge, the highest in two years, since September 2022, suggests Canadian businesses are proactively stockpiling in anticipation of potential trade disruptions, possibly stemming from future US trade policies.
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Strategic policy adaptations and opportunities
Canada’s trade strategy for 2025 includes a “buy Canadian” initiative, which, while promoting domestic products, can indirectly benefit Vietnamese exporters who effectively leverage the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP’s origin provision enables zero-tariff exports to other member countries, opening new avenues for Vietnamese businesses.
Challenges and considerations
However, Vietnam must remain vigilant regarding trade defense measures. Recent rulings by the Canada Border Services Agency (CBSA) have resulted in anti-dumping taxes on Vietnamese oil pipes (37.4%) and upholstered chairs (179.5%) for companies that failed to meet information requirements.
Record-breaking trade figures
In 2024, bilateral trade between Canada and Vietnam reached a significant milestone, with Vietnam’s exports to Canada totaling $10.6 billion, an 8.2% increase from the previous year. This marks the first time Vietnam’s exports have surpassed the $10 billion mark, resulting in a trade surplus of approximately $9.9 billion. Vietnam remains a critical trade partner for Canada, ranking as its 7th largest import partner among the top 10 trading nations and the leading import partner within ASEAN, accounting for nearly 45% of Canada’s ASEAN imports.
Positive effects/Benefits for international buyers on SourceVietnam.com
- Increased affordability and competitiveness: The reduction of internal trade barriers in Canada directly translates to lower costs for Vietnamese goods, making them more affordable for international buyers. This enhanced price competitiveness provides a significant advantage when sourcing from Vietnam.
- Expanded product range and availability: The surge in exports across diverse sectors, from machinery and electronics to agricultural products and consumer goods, means international buyers have access to a broader range of high-quality Vietnamese products. SourceVietnam.com can be the hub to find these varied goods.
- Streamlined trade processes: The simplification of import procedures in Canada results in faster and more efficient trade transactions, reducing lead times and logistical complexities for international buyers.
- Enhanced supply chain stability: The proactive stockpiling by Canadian businesses in anticipation of potential trade disruptions ensures a more stable and reliable supply chain for international buyers sourcing from Vietnam.
- CPTPP advantages: The CPTPP’s zero-tariff benefits provide international buyers with cost-effective access to Vietnamese products destined for other CPTPP member countries, expanding market reach and profitability.
- Reliable trade partnership: Vietnam’s established position as a key trade partner for Canada, with consistent growth and a substantial trade surplus, underscores its reliability and stability as a sourcing destination. SourceVietnam.com users can trust in the stability of their business partners.
- Access to growing sectors: The strong growth in key sectors like machinery, electronics, and agriculture presents opportunities for buyers to diversify their sourcing and tap into emerging markets.
By leveraging the insights and opportunities presented by these trade policy changes, international buyers on SourceVietnam.com can capitalize on the growing potential of Vietnamese exports and establish fruitful, long-term partnerships.
