Insight:
- This visit marks the largest U.S. agricultural trade mission to Vietnam, coinciding with our two nations’ first anniversary of the comprehensive strategic partnership.
- The bilateral cooperation between Vietnam and the United States is highly valued and holds great promise for the future.
A 100-member U.S. trade delegation, comprised of 35 business representatives and officials from the U.S. Department of Agriculture and nine state departments of agriculture, along with representatives from 21 U.S. Department of Agriculture cooperators, is visiting Vietnam to explore bilateral cooperation opportunities.
This is the largest-ever U.S. agricultural trade mission to Vietnam and is led by Under Secretary for Trade and Foreign Agricultural Affairs Alexis Taylor, in celebration of the first anniversary of the U.S.-Vietnam Comprehensive Strategic Partnership.
Under Secretary, Taylor explained that the mission focuses on connecting with key importers for business-to-business meetings and learning about local and regional market conditions through site visits and briefings with industry experts and government officials in Hanoi and Ho Chi Minh City.
The export situation of the United States to the Vietnamese market
According to Under Secretary Taylor, the Southeast Asian market presents significant opportunities for U.S. exporters. Vietnamese consumers are increasingly turning to U.S. products, particularly in the sectors of nuts, fresh fruits, poultry, beef, and pork.
The United States also exports fresh fruits such as cherries, peaches, apples, oranges, and blueberries to Vietnam. In the import market, in August 2024, total imports from the United States reached $7.78 billion, a 6.9% increase compared to the same period last year.
Beyond agricultural products, some notable products exported by the United States to Vietnam include machinery and equipment (industrial machinery, agricultural equipment, etc.), consumer goods (automobiles, computers, pharmaceuticals, etc.), and raw materials (chemicals, plastics, etc.).
Beyond the aforementioned product categories, chemicals and chemical products have emerged as a significant import from the United States to Vietnam. These imports recorded a robust growth of 9.5% year-on-year in the first five months of 2024, reaching a value of $482 million, representing a $42 million increase.
Vietnam’s export situation to the United States
With the gradual recovery of the global market and an increase in export orders, the import-export activities of goods in August 2024 have shown positive signs. According to the Ministry of Agriculture and Rural Development, the United States has become Vietnam’s largest market for agricultural, forestry, and fishery products in the first eight months of 2024.
In the review period, the export turnover of these products to the US market reached approximately $8.58 billion, accounting for 21.4% of Vietnam’s total export turnover of these products, a 23.5% increase compared to the same period last year.
In August 2024, the preliminary total import-export turnover reached $70.65 billion, up 0.8% compared to the previous month and up 13.5% compared to the same period last year. In the first eight months of 2024, the preliminary total import-export turnover reached $511.11 billion, up 16.7% compared to the same period last year, of which exports increased by 15.8% and imports increased by 17.7%.
The United States remains Vietnam’s largest export market with a preliminary value of $77.9 billion, accounting for 29.4% of the country’s total export turnover and increasing by 25.4% compared to the same period last year (while the same period last year decreased by 19%). By market, in the first eight months of 2024, Vietnam’s trade surplus with the US is estimated at $68.1 billion, a 28.6% increase compared to the same period last year.
Vietnam is currently the 10th largest exporter of agricultural products to the United States. Vietnam has also officially exported 8 types of fruits to the US market, including pomelo, mango, dragon fruit, longan, rambutan, lychee, custard apple, and coconut. In the future, Vietnam expects to export more products to this large market.
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Prospects for future development in bilateral cooperation
The United States is projected to remain a major export market for Vietnam in the coming months. The U.S. has already granted market access for fresh coconuts from Vietnam and is in the final stages of approving the same for Vietnamese passion fruit.
Meanwhile, Vietnam has opened its market to U.S. grapefruit, peaches, and nectarines. Additionally, the Vietnamese Ministry of Agriculture and Rural Development and the U.S. Department of Agriculture are finalizing procedures for other products such as oranges, tangerines, plums, and seedless lemons.
Vietnam’s key export items to the U.S. market also face pressures related to trade remedy investigations, origin fraud, and technical barriers such as environmental, sustainability, and green transition requirements.
Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan affirmed that the United States is an important partner of Vietnam and expressed a strong desire to further enhance the trade and investment relationship between the two countries. He emphasized that elevating the bilateral relationship to a Comprehensive Strategic Partnership has opened up many opportunities for cooperation in all fields, including economics and trade.
Vietnam, especially the Ministry of Industry and Trade (MoIT), will continue to actively cooperate with the United States to comprehensively address the concerns of both countries, thereby maintaining a stable trade relationship and aiming for a balanced, sustainable, and mutually beneficial trade relationship, he stressed.
Opportunities and challenges facing Vietnamese businesses
While the US is a wide-open market for imports, its very openness makes it one of the most challenging and competitive markets. Vietnam not only has to compete with other countries producing similar products but also with domestic manufacturers.
Moreover, the US export market has many complex regulations and procedures, subjecting Vietnamese businesses to trade, technical, and food safety barriers. Additionally, the rising production costs of Vietnamese agriculture due to increases in fuel prices and supply chain disruptions pose further challenges.
The need to invest in green production processes and reduce emissions, as required by US buyers, also forces Vietnamese businesses to adapt. Coupled with the long geographical distance and high transportation costs, Vietnamese agricultural products are struggling to find ways to minimize production costs to remain competitive.
Faced with increasing price pressures, the Ministry of Industry and Trade recommends that Vietnamese enterprises enhance their investment in preservation technology to enable fresh fruits to be transported by sea to the United States. By leveraging Free Trade Agreements (FTAs) to secure the best tariff preferences, Vietnamese products can gain a competitive edge.
Beyond fresh fruits, Vietnamese enterprises can boost exports of processed products using modern technology. In the long term, Vietnamese producers should implement solutions to develop ‘smart agriculture’ models, applying technology to agriculture to improve productivity, quality, and mitigate the impacts of climate change. To overcome these barriers and challenges, Vietnamese enterprises need to improve, innovate, and enhance product quality. Some key areas to focus on include:
- Enhancing product quality: Investing in technology and product innovation to meet stringent US market standards.
- Building a strong brand: Creating a strong and reputable brand image to compete with rivals.
- Expanding distribution networks: Seeking reliable distribution partners in the US to bring products closer to consumers.
- Participating in trade fairs and exhibitions: Seeking opportunities to connect with potential importers and partners in the US.
- Learning from other businesses: Learning from successful Vietnamese businesses exporting to the US.
- Government support: Seeking support from government agencies on market information, customs procedures, and preferential policies.
SourceVietnam.com: A global export support platform
In this context, not only agricultural products but also many other export sectors to the US have identified opportunities and are expected to make new breakthroughs. Therefore, experts predict a positive overall outlook for Vietnamese product imports into the US market.
Innovative technological solutions are emerging to facilitate a wider range of Vietnamese businesses in successfully exporting to the US market. One such notable example is the SourceVietnam.com platform. The online platform simplifies the export process, enabling Vietnamese businesses to tap into the vast US market and connect with global buyers. Combined with the positive outlook for Vietnamese exports, this development signals a bright future for Vietnam’s global integration.
SourceVietnam is not only an export platform but also a bridge connecting Vietnamese manufacturers and businesses with foreign enterprises. Global companies can also search for suppliers and import directly from Vietnam at the best prices and with the highest quality products.
For Vietnam, this will be the optimal means to export products to the world. All barriers such as language, payment, shipping, and product information are optimized, providing Vietnamese businesses with more favorable export tools. With the SourceVietnam e-commerce platform, export opportunities will continue to expand in the future.
Conclusion
The bilateral trade relationship between Vietnam and the United States is expected to expand and flourish further in the future. Both governments are committed to increasing cooperation and trade opportunities in both countries. Through continued efforts, the bilateral partnership will grow stronger and benefit both nations.
