The US a leading trade partner of Vietnam

US businesses expanding investment in Vietnam

Giving a speech at the Vietnam-US Trade Forum, Vietnamese Deputy Minister of Industry and Trade Do Thang Hai assessed the Vietnam-US relationship has achieved strong, substantive progress in different fields, regarding both bilateral and multilateral frameworks, since the two countries normalized relations in 1994. The bilateral economic, trade relations have experienced important developments, with the two-way trade increasing more than 275 times, from about US$450 million to US$124 billion in 2022.

The General Department of Vietnam Customs’ data show that bilateral trade hit US$51.3 billion in the first half of 2023, including Vietnam’s exports worth US$44.4 billion (down 21.5 percent compared to the same period in 2022 and accounting for 26.95 percent of the country’s total export value) and Vietnam’s imports worth US$6.87 billion (down 9.9 percent and representing 4.5 percent of the total).

Hai attributed the decreases to the difficult economic situation and high inflation rate in the US, which significantly decreased the community’s purchasing power.

Vietnam’s exports have grown in recent months, auguring improvements in 2023. Vietnam’s traditional and strong exports, including textiles and garments, furniture, leather and footwear, and electronics, among others, are expected to grow.

According to the Ministry of Planning and Investment, US direct investment in Vietnam has tended to increase. As of the end of 2022, US companies invested in Vietnam a total registered capital of US$11.4 billion through 1,216 projects, making the US rank 11th among 141 countries and territories investing in the country.

Many leading US corporations have already been present in Vietnam, including Apple, Qualcomm, Nike, Morgan Stanley, Intel, and Google, among others. In particular, Boeing recently said it wants to expand its facilities in Vietnam to provide materials, build technical centers and expand connections with domestic partners.

Enhancing industrial, energy connectivity

At the forum, Boeing Supply Chain Business Development Manager for Southeast Asia, Japan and the Republic of Korea Maxime Dourdan hailed the Vietnamese market’s important role in Boeing’s business strategy as well as its cooperation opportunities with Vietnamese firms.

Noting that Boeing’s tier-1 suppliers were mainly businesses in Japan and the Republic of Korea (RoK), he added, “Compared to these two countries, Vietnam has a significant advantage in terms of production costs. However, low cost is not all of Vietnam’s advantages. Vietnam also has highly skilled engineers.”

Dourdan said that Boeing was encouraging tier-1 and tier-2 suppliers in the RoK and Japan to find partners in Vietnam to meet tier-3 needs. The giant will organize training programs for the aviation industry in Vietnam, he said. Boeing currently has a dedicated team looking for suppliers in Vietnam to find products that meet its standards. However, finding a supplier has to be done step by step. Initially, Vietnamese businesses can only be tier-3 and tier-4 suppliers, but they will gradually be able to provide more important products, Dourdan noted.

Truong Thi Chi Binh, Vice President and General Secretary of the Vietnam Association of Supporting Industries (VASI), said Vietnamese support industry businesses are mainly small- and medium-sized enterprises mostly producing according to orders of customers. They have been improving to meet partners’ requirements for using renewable energy, and green and recycled materials.

Vietnamese businesses have begun to participate in renewable and new energy markets. They nowadays make Vinfast electric vehicle battery trays and wires and have exported these products to the US. Vietnamese producers are capable of manufacturing complete equipment such as jack-up drilling rigs used in offshore wind power projects, and wind turbine devices.

She said that to join the playground and become a link for the aviation sector in general and Boeing in particular, Vietnamese firms must make long-term preparations.

As an example, Binh noted that 30 years ago, Malaysia adopted a strategy to develop the aerospace industry, which gave the time to develop the strength needed to participate in the international market. In Vietnam, businesses are able to work in the electric car sector now and they will have the opportunity to work for other industries, including aviation. If Boeing wanted to find suppliers in Vietnam, Vietnamese businesses would be willing, she said.