Why is the US Vietnam trade relationship fluctuating?, The White House says Biden will visit Vietnam

Introduction: According to statistical data, the United States is Vietnam's largest export market with an export value of 62.3 billion US dollars.

The White House website released a statement on September 28th that US President Biden will visit Vietnam on September 10th.

The White House stated in a statement that during his stay in Hanoi, Vietnam, Biden will hold meetings with Vietnamese leaders such as General Secretary of the Communist Party of Vietnam, Nguyen Phu Trong, to discuss how to further deepen cooperation between the United States and Vietnam.

The leaders of the United States and Vietnam will explore opportunities to promote technological and innovation driven economic growth in Vietnam, expand connections between the two peoples through educational exchanges and labor development programs, address climate change, and enhance peace, prosperity, and stability in the region.

US government members visit Vietnam intensively

From the itinerary, it can be seen that Biden will attend the G20 summit in New Delhi, India from September 7th to 10th, and then visit Vietnam.

On September 11th, Biden will return to Alaska to attend the commemorative ceremony related to the 22nd anniversary of the 9/11 attacks.

In response to reports that the United States and Vietnam will sign a strategic cooperation agreement on artificial intelligence and semiconductors during Biden's visit, White House spokesperson Jean Pierre said at a White House press conference on the 28th that she will share more information about the visit, such as the agenda and deliverables, but she said she "does not want to say it in advance at this time.".

Biden announced in early August that he would soon travel to Vietnam and stated that Vietnam hopes to change the relationship between the two sides and become a partner of the United States. Previously, in March of this year, Biden had a phone conversation with Nguyen Phuc Trong. Subsequently, senior US government officials visited Vietnam intensively.

In April, US Secretary of State Antony Blinken visited Vietnam. In late July, US Treasury Secretary Yellen visited Vietnam and expressed his hope to further deepen the economic and trade investment relationship between the US and Vietnam, and to achieve an upgrade of the bilateral relationship as soon as possible.

Previously, from February to March, US Trade Representative Dai Qi and the head of the US Agency for International Development, Bauer, visited Vietnam respectively.

At that time, Dai Qi stated that the United States and Vietnam had controlled differences related to timber trade, demonstrating their constructive ability to address challenges. She also stated that her visit to Vietnam highlights the enduring commitment of the United States to Vietnam's relationship with the region.

According to the website of the Ministry of Foreign Affairs, on August 10th, Assistant Foreign Minister Nong Rong held diplomatic consultations with Vietnamese Deputy Foreign Minister Nguyen Minh Yu.

During this period, Nguyen Minh Yu stated that China is the only country that brings together all the priority directions of Vietnam's foreign policy, and developing Vietnam China relations is Vietnam's strategic choice and top priority. The Vietnamese side is willing to strengthen high-level exchanges with the Chinese side, deepen all-round cooperation in economic and trade investment, infrastructure, tourism, and culture.

The ups and downs of US Vietnamese trade

In 2013, the United States and Vietnam announced the establishment of a comprehensive partnership to promote cooperation in areas such as economy, trade, science and technology, defense and security.

According to Xinhua News Agency, at that time, the leaders of the United States and Vietnam issued a joint statement after a meeting at the White House, emphasizing their commitment to creating a "new stage" in bilateral relations based on mutual respect and common interests. The comprehensive partnership will establish mechanisms for cooperation between the two countries in politics and diplomacy, trade and economy, science and technology, education and training, environment and health, legacy of war issues, defense and security, human rights, culture, sports and tourism.

This year marks the tenth anniversary of the announcement of the establishment of a comprehensive partnership between the United States and Vietnam. In the past two years, the bilateral trade volume between the United States and Vietnam has also shown a significant growth trend. By observing data from the US Census Bureau, it can be seen that Vietnam's exports to the United States have steadily increased since 2021. However, after entering 2023, its trade exports to the United States have also decreased year-on-year.

According to statistics from the US Census Bureau, as of June 2023, Vietnam is the 11th largest trading partner of the United States, with a total merchandise trade of $57.6 billion, accounting for 2.3% of the total US trade. Among them, the United States imported $52.8 billion from Vietnam and exported $4.9 billion.

Mexico, Canada, and China are respectively the first to third largest trading partners of the United States. According to data from the US Census Bureau, the top three trading partners account for 15.7%, 15.4%, and 10.9% of the total US commodity trade, with trade volumes of $396.6 billion, $388.4 billion, and $275.6 billion, respectively.

The latest statistical data released by the Vietnamese Bureau of Statistics on the 29th showed that in August 2023, the total import and export of goods in Vietnam reached 60.92 billion US dollars, an increase of 6.7% month on month and a decrease of 7.9% year-on-year.

In the first eight months of 2023, the total import and export volume of goods in Vietnam reached 435.23 billion US dollars, a year-on-year decrease of 13.1%. Among them, the export value decreased by 10%, the import value decreased by 16.2%, and the cumulative trade surplus of goods was 20.19 billion US dollars. Statistics show that the United States is Vietnam's largest export market, with an export value of 62.3 billion US dollars. China is Vietnam's largest import market, with an import value of 68.1 billion US dollars.

In the first eight months of 2023, Vietnam's trade surplus with the United States is expected to be 53 billion US dollars, a year-on-year decrease of 21%; The expected trade surplus with the European Union is 19.6 billion US dollars, a year-on-year decrease of 9.7%; The trade deficit with China was 32.3 billion US dollars, a year-on-year decrease of 30.2%; The trade deficit with ASEAN was 5.2 billion US dollars, a year-on-year decrease of 38.4%.

Cui Fan, a professor at the School of International Business and Economics at the University of International Business and Economics and director of the Research Department of the China World Trade Organization Research Association, told First Financial reporters that the domestic economy of the United States is very hot, but imports have indeed shrunk, which is related to its import substitution industry policy.

From the demand side, from January to May 2023, without seasonal adjustment, the total amount of US goods trade was $2138.933 billion, a year-on-year decrease of 3.7%. Among them, the total export value of goods was 837.554 billion US dollars, a year-on-year increase of 0.9%; The total value of imported goods was 1301.379 billion US dollars, a year-on-year decrease of 6.4%. Among the top ten container ports in the United States, the inbound volume in May 2023 decreased by 20.1% year-on-year. This result marks the eighth consecutive month of double-digit year-on-year decline.

Cui Fan explained to reporters that the United States has accelerated the return of manufacturing in recent years. The subsidies and other policies for the semiconductor and new energy industries in the United States are industrial policy measures with import substitution effects.

"These measures have promoted domestic manufacturing investment and production in the United States, while also restricting imports. Therefore, we see that the economic growth of the United States has not only failed to bring about an increase in imports, but has also been accompanied by an overall decline in imports." He explained, "In addition to prioritizing the return of manufacturing, the United States is also promoting policies such as nearshore outsourcing and friendly shore outsourcing. Therefore, we see that the impact of the contraction of US imports on exports varies among different countries. Some countries' exports to the United States have even increased, but in East Asia and Southeast Asia, except for trade transit countries like Singapore, there has been a significant decline in exports to the United States."

Roger, a senior figure who has been working as a freight forwarder in the United States for a long time, also told First Financial reporters, "The total demand in the United States has decreased, and no exporting country can be spared, but the degree of impact is completely different."

"At present, the reason for the export of containers from Vietnam to the United States is that the largest commodity exported by Vietnam to the United States is furniture, accounting for about 40%. However, in the past two years, furniture has also been one of the categories with the largest decline in import volume in the United States," he explained. "The American people have already finished what they should have bought and replaced before, and will not immediately replace sofas, so furniture sales in the United States have been declining."