However, despite the positive trends, certain export industries remain hampered by complicated domestic regulations, and Vietnam faces mounting trade challenges in its largest export market, the United States.
Domestic Sector Shows Accelerated Growth
According to the General Statistics Office of Vietnam, July 2024 saw an estimated export turnover of USD 35.92 billion, a 6.7% increase over the previous month. The domestic sector alone reached USD 9.87 billion, representing a remarkable 9.8% growth, while the foreign-invested sector, including crude oil, grew by 5.6%, contributing USD 26.05 billion. This performance is even more impressive when compared to July 2023, with total export turnover rising by 19.1%. Of this, the domestic sector surged by 25.9%, and the foreign-invested sector grew by 16.7%, underscoring the strong momentum of domestic enterprises.
In the first seven months of 2024, the total export turnover was estimated at USD 226.98 billion, marking a 15.7% increase over the same period last year. The domestic sector contributed USD 63.08 billion, up by 21.1%, while the foreign-invested sector contributed USD 163.9 billion, a growth of 13.8%. Although the domestic sector accounts for just 27.8% of total export turnover, it is expanding at a faster rate than the foreign-invested sector, highlighting the increasing strength and importance of local businesses in Vietnam’s export landscape.
A particularly bright spot in Vietnam’s export performance is the agricultural sector. After seven months, agricultural export turnover was estimated at USD 21.4 billion, a 19.6% increase over the same period in 2023. Much of this growth is attributed to higher global prices, with many key agricultural products enjoying double-digit growth. For example, coffee exports surged by 30.9%, rice by 25.1%, tea by 34.8%, and cashew nuts by 22.1%. Other products, such as pepper (up 46.3%) and vegetables and fruits (up 24.3%), also contributed to the sector’s strong performance.
Similar trends were observed in other industries. Wood and wood products saw an export turnover of USD 8.87 billion, a 23.3% increase, while leather and footwear exports surpassed USD 12.8 billion, growing by 10.1%. Seafood exports also rose by 7%, totaling over USD 5.28 billion.
Business leaders in these sectors are optimistic about future growth. Phạm Quang Anh, Director of Dony Garment Company, reported that the company’s order book is so full that they had to turn down some orders with tight deadlines. Likewise, Lý Kim Chi, President of the Ho Chi Minh City Food and Foodstuff Association, noted that many of the association's member companies have already secured orders through the end of the year, with some even having orders in place until the first quarter of 2025.
Chi also pointed out that Vietnam's agricultural and food products now reach more than 180 countries and territories, thanks to favorable natural conditions and a shift toward high-tech farming. She highlighted the increasing global demand for organic products as an opportunity for Vietnamese businesses to innovate and meet evolving consumer preferences.
Challenges in the U.S. Market
Despite the favorable export conditions, Vietnamese exporters face growing challenges in international markets, particularly in the United States. As Vietnam has integrated into numerous free trade agreements (FTAs), its access to global markets has increased, but so too have the trade defense investigations aimed at protecting the domestic industries of importing countries.
According to the Trade Remedies Authority of Vietnam (TRAV), the United States currently leads the world in trade defense measures, accounting for the largest number of investigations targeting Vietnamese exports. To date, the U.S. has initiated 64 investigations into Vietnamese products, out of a total of 253 cases globally. This reflects the level of scrutiny Vietnamese goods face in the U.S. market, particularly given the fact that the U.S. does not officially recognize Vietnam as a market economy.
This lack of recognition significantly complicates trade relations, especially in anti-dumping and anti-subsidy investigations. In such cases, the U.S. applies a "surrogate country" methodology, meaning it uses data from a third country to determine the fair market value of Vietnamese products. This often results in higher anti-dumping duties, as the surrogate country’s costs are typically higher than those in Vietnam. In the case of anti-subsidy investigations, the U.S. uses surrogate benchmarks—such as loan interest rates or land rents from other countries—to calculate subsidy margins, which inflates the perceived subsidies that Vietnamese businesses receive.
For example, the shrimp industry has faced numerous challenges due to these practices. Hồ Quốc Lực, Chairman of the Board of Directors of Sao Ta Food Joint Stock Company, described the situation as unfair, particularly since 73 countries—including major economies such as the UK, Canada, Japan, and Australia—have recognized Vietnam as a market economy. The U.S.'s refusal to do so places Vietnamese exporters at a disadvantage, especially in legal disputes such as anti-dumping or anti-subsidy cases.
Lực noted that when Vietnam is treated as a non-market economy, the U.S. does not recognize the data provided by Vietnamese enterprises for tax calculation purposes. Instead, it relies on data from third countries, which often leads to higher duties and costs, as well as additional bureaucratic hurdles. This creates significant challenges for Vietnamese businesses trying to compete in the U.S. market.
The wood industry faces similar difficulties. Although the U.S. is the largest export market for Vietnamese wood products, it is also where Vietnamese companies encounter the most trade defense investigations. Anti-dumping and anti-subsidy cases in this sector have become common, making it harder for Vietnamese exporters to compete fairly.
In response to these challenges, the Ministry of Industry and Trade has pledged to support Vietnamese businesses in navigating trade defense investigations and to work closely with them to protect their interests. The Ministry has also emphasized the importance of strengthening Vietnam’s legal framework to better support exporters and ensure compliance with international trade rules.
For Vietnam to maintain its export momentum, businesses will need to invest in innovation, adapt to changing market demands, and comply with the increasingly complex international trade environment. By doing so, they can better position themselves to take advantage of emerging opportunities while minimizing the impact of trade defense measures.
The Vietnamese government, for its part, must continue to engage in diplomacy and trade negotiations to secure favorable conditions for its exporters, particularly in major markets like the U.S. Additionally, addressing domestic regulatory bottlenecks will be crucial in helping industries maximize their export potential.
In summary, while challenges remain, Vietnam’s export sector is poised for continued success. With the right strategies and support, Vietnamese businesses can navigate the global trade landscape and ensure that their products reach even more markets in the years ahead.
