As the trade dispute between the U.S. and China continues to escalate with no sign of abating, US businesses are actively looking for new destinations to escape tariff-related disruptions and complex regulatory environment.
Vinh Yen city in Vietnam.
An GO-TO destination for the manufacturing industry
Vietnam finds itself at the golden time to reap the tremendous benefits from the US-China Trade war. As one of the most dynamic countries in Southeast Asia, Vietnam possesses outstanding advantages such as highly skilled workforce, favorable tax environment and thriving logistics field.
According to statistics of Vietnam’s Ministry of Finance, Vietnam’s labor wages are usually one-third lower than China’s. Located in the ASEAN region and closer proximity to China, Vietnam enables manufacturers to sell and move equipment across borders faster.
This not only assists companies in selling and shipping goods from China to Vietnam and vice versa, but also creates favorable conditions to facilitate trade with neighboring ASEAN countries.
The infrastructure, furthermore, that is always ready to receive large customers is a bright spot. Industrial parks are gradually transforming the model of environmentally sustainable development, using resources and energy efficiently.
Vietnam welcomes the wave of FDI capital moving away from China
Due to the costs associated with the trade war, the number of multinational companies that have moved or plan to move from China to Vietnam is escalating, including large US companies such as Apple, Intel, Google, Nike and Key Tronic EMS.
The Ministry of Planning and Investment have studied that from the beginning of the year until now, the total foreign investment capital registered in Vietnam is 10.8 billion USD.
Bilateral trade between Vietnam and the United States has set a new record in 2021 with 111.56 billion USD, witnessing an increase by nearly 21 billion USD compared to the previous period. This figure has made the US the second largest trading partner with import and export turnover with Vietnam which ranks only after China.
With its highly open economy, Vietnam could not only be an ideal alternative to China but also emerge as Asia’s economic tiger in the near future.