Vietnam has a ratio of international trade to GDP among the highest in the world, at 165%, after only Singapore. In 2024, Vietnam had a trade surplus of US$25 billion, equivalent to 5% of GDP. However, this trade surplus was mainly generated by direct foreign investors in Vietnam. During the competition in the U.S. and the EU markets, foreign investors, including manufacturers from the United States, have decided to come to Vietnam to enjoy the open, equal treatment which the Vietnamese law offers to manufacturers, from both home and abroad, taking advantage of the low labor cost and getting the label originating from a country not subject to high U.S. tariffs and trade barriers. They mainly import intermediary goods or raw materials from their home countries and territories, such as South Korea, Taiwan and China, to produce goods for export to the U.S. and EU countries. For instance, in 2022, when Vietnam fully publicized data, Vietnam’s textile and garment exports brought US$45.4 billion but the sector imported US$24.1 billion worth of materials, or 58% of the export value. Material imports amounted to 87% of the export value for machinery, phones, and other electronic devices. Due to the prominent role of […]
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