Exports to the United States suddenly fall sharply

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The United States still remains No.1 in Vietnam's textile export market. Photo: T. Binh.

Lower than the national average

By the end of the first 4 months of 2017, Vietnam’s total export turnover reached $US12.445 billion, an increase of 8.7% compared to the same period in 2016.

This figure represented a sharp decline in growth over this period last year as Vietnam maintained its export growth rate to the US at 15.7%.

Notably, the growth rate of exports to the United States decreased in the context of strongly growing export activities of the country at 16.8%.

Thus, the growth rate of exports to the United States at 2.4 times of the national average in the first 4 months of 2016 has dropped in the first months of 2017 (lower than the national average of 7%).

There have been no specific assessments of the cause of the slowdown in exports to this largest market, but does the protectionist attitude of US President, Mr. Donald Trump have a certain impact on exports of our country?

Currently, among the groups of Vietnam's exports to the US, textiles are still ranked No.1. Like the general situation of export activities of Vietnam to the US, the turnover of textiles is also lower than the overall growth rate of this industry.

Specifically, in the past 4 years, the textile and garment exports to the United States reached $US 3.636 billion, an increase of 7.1% compared to the same period in 2016, while the overall growth of textile and garment exports in the same period reached 9.4%.

Regarding the growth rate, exchanging with a reporter of the Customs Newspaper, Mrs. Nguyen Thi Hong Thu – the Head of the Information and Communications Committee of Vietnam Textile and Apparel Association (VITAS) said that the United States was the largest Vietnam’s export market of the textile industry. Accordingly, when the growth of market reached to a certain extent, the growth rate will slow down. Besides, the markets which are having lower export values will have a higher growth rate.

Catching up the market

One of the key exports of Vietnam to the United States for many years has been seafood. However, in the past 4 months of 2017, the turnover of this commodity decreased by 11.4% compared to the same period in 2016, equivalent to a reduction of $US 46 million.

Speaking to with a number of big seafood exporters, we received optimistic feedback and found that the business community was in control of the US market.

Speaking to a reporter of the Customs Newspaper on the telephone on 16th May 2017, Mr. Tran Van Pham, the Director General of Soc Trang Seafood Joint Stock Company said that the US market accounted for about 40% of the annual export market share of the company, with turnover reaching $US 70 million to $US 80 million per year. However, from the beginning of 2017 to date, because Japan promoted the purchase of shrimp products - the main commodity in the fishery sector, the growth rate of shrimp exports in particular and seafood in general to Japan increased higher compared to the United States.

On the other hand, in Vietnam, only Minh Phu Seafood Joint Stock Company is imposed an anti-dumping tax rate of 0% while other seafood enterprises are subject to an anti-dumping tax rate of 4.7%, so this company has been identified as having the advantage of exporting seafood to the US in the coming months, while other businesses will seek to expand their exports to other markets.

According to Mr. Tran Van Pham, in order to have stable export activities to the United States, one of the key issues is to increase the proportion of technology contents in production and exports. Because products mainly based on manual labour will fiercely compete from other countries.

"India and a number of Asian countries are paying great attention to exports to the United States, especially to those with basic labour, so if Vietnam does not change, it will be difficult to compete", Mr. Tran Van Pham analysed. Also, due to the fact that the United States still does not recognise Vietnam as a market economy, Vietnam’s exports still face many obstacles, especially the imposition of the anti-dumping tax.

According to the speech of the new President of the United States on the protection of domestic production, Tran Van Pham said that this speech also caused anxiety to certain businesses in Vietnam, but there had not been specific changes in the policy of trade management and import-export of the US.

Key exports tend to sharply decrease VCN - Although the total value of an export turnover is higher than in 2016, recently some ...

"I think that Vietnamese authorities, as well as the business community, will always follow the developments in Vietnam's largest export market in order to respond appropriately", the Director General of Soc Trang Seafood Joint Stock Company said.