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TDM Insight: Vietnamese Exports Rebound in 2024

After a tepid recovery in 2023, Vietnam’s trade machine appears to be firing on all cylinders so far in 2024. The country boosted exports 16.8% year-on-year to $92.9 billion in the first quarter, underpinning gross domestic product growth of 5.7%. This is no coincidence. Vietnam’s export sector is key to its economic growth. It is heavily reliant on exports to the world’s two supereconomies, China and the U.S. Vietnam also increased total imports 14% in the first quarter to $85.1 billion. 

The Steel Trick

Vietnam’s top export market is still the U.S. Total exports to the U.S. increased 24.1% in the first quarter to $25.8 billion. (Imports from the U.S. rose 11.9% to $3.4 billion.) A lot of that trade is high-tech trade connected to global high-tech supply chains. Vietnam’s exports smartphones and related parts to the U.S. increased 30.4% to $3.1 billion. By comparison, shipments of smartphones and parts to China fell 28.4% to $2.5 billion. (It’s not all doom in tech. Exports of still and video cameras soared to China 119.7% to $1.4 billion.) But the biggest increase in U.S.-Vietnam trade came from an unexpected source. Vietnam more than doubled iron and steel exports to the U.S. 225.3% year-on-year in the first quarter to $399.6 million. By tonnage, iron and steel shipments increased 186.2% to 463.9 thousand tons. If that trend continues, expect trade officials in Washington to take a closer look. Overall, Vietnam boosted exports of iron and steel 40.1% by value to $2.4 billion, and 42% by volume to 3.2 million tons.

Agriculture’s Steady Hand

The country again boosted agricultural exports. Shipments of coffee, for example, rose 56.7% to $1.9 billion. Rice shipments increased 45.6% to $1.4 billion. Vietnamese trade officials hope to continue to expand markets. In April, Vietnam and Washington state officials signed a memorandum of understanding. In January, Vietnamese trade officials announced that they’d agreed to new protocols with Beijing to live restrictions on poultry and rock lobsters and further boost food shipments to the country. Vietnamese farmers can now export dragon fruit, watermelon, banana, lychee, longan, rambutan, jackfruit, mango, mangosteen, durian and passion fruit, plus black jelly, sweet potato and bird’s nest to China, according to governments websites. In the first quarter of 2024, Vietnam hiked fruits and vegetables exports to China 32.4% to $759.4 million. Shipments of manioc and manioc products to China increased 20.7% to $400.1 million.

Energy Needs

Ramping up industrial development isn’t cheap. If it’s going to continue to boost metal exports, Vietnam will have to gobble up more fossil fuels. In the first quarter of 2024, it increased imports of coal 35.4% by value to $1.9 billion and 76% by quantity to 14.7 million tons. It hiked crude oil imports 20.2% by value to $2 billion and 23.6% by quantity to 3.3 million tons.

Consumers Matter

The U.S. is Vietnam’s top export market, but China is its number one source of foreign goods. Imports from China rose 29% to $30.5 billion. (Shipments to China increased 8.7% to $13.1 billion.) The mix of imports suggests a vibrant supply chain but also a strong consumer economy in Vietnam. For example, imports of textiles and footwear (+14.6%), phones (+22.4%), and motor vehicles (+91.4%) from China all increased.  

The Rest of the World

Vietnam is still seeking to diversify trade with countries other than China and the U.S. Exports to the Netherlands increased 24.9% to $2.9 billion, and shipments to the United Kingdom increased 35.2% to $1.9 billion. First-quarter exports to South Korea increased 8.5% to $6.4 billion, and imports ticked up 2% to $12.6 billion. Vietnam boosted shipments to Russia 42.8% to $530 million. Much of that was textiles and garments. Exports of those rose 186.1% to $179.1 million. The rest was dominated by coffee, fruits and vegetables, and seafood.