Vietnam enterprises urged to diversify markets amid Covid-19 affecting exports to US
Vietnam enterprises urged to diversify markets amid Covid-19 affecting exports to US
The US did not impose any restrictions on Vietnam’s exports, but the Covid-19 pandemic could impact the US – Vietnam trade outlook.
Vietnamese enterprises should consider the Covid-19 pandemic an opportunity to revise their business strategies and diversify export markets, especially as a prolonged pandemic in the US would affect Vietnam's largest export market, according to Vietnamese Ambassador to the US Ha Kim Ngoc.
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As of present, the US is one of Vietnam’s major trading partners and the largest export market. Statistics from the US Department of Commerce showed bilateral trade in 2019 reached US$77.6 billion, effectively making Vietnam one of the 15 largest trading partners of the US.
In the first two months of 2020, Vietnam’s exports to the US rose 25.7% year-on-year to US$10.26 billion while the Covid-19 pandemic is causing negative impacts on Vietnam’s trade with other markets.
Ngoc stressed the two governments are closely cooperating to ensure a more balanced and sustainable trade relationship.
According to Ngoc, the US government has not imposed any restriction on importing Vietnam’s textile and garment products as rumored. He, however, acknowledged as the Covid-19 pandemic turns more complicated globally, a decline in trade activities, including the textile and garment industry, is inevitable.
To prevent the spread of the pandemic, major US retailers such as Macy, TJ Max, Walmart, or Target, have temporarily scaled down operations from now on until the end of March, Ngoc added.
A difficult economic situation also led to a decrease in Vietnam’s exports to the US. This would deal a big blow for Vietnam’s textile and garment industry. In 2019, Vietnam’s exported textile and garment products worth nearly US$15 billion to the US, accounting for 45% of total exports of the industry.
During the first two-month period, the export turnover of garment and textile products stood at US$2.25 billion, up 5.3% year-on-year or 48% of the industry’s exports.
Ngoc expected local enterprises to strictly follow Prime Minister’s Nguyen Xuan Phuc instructions in preventing trade origin fraud and tax evasion, which could potentially make the US imposes punitive tariffs on Vietnam’s imports.
Once the Covid-19 pandemic is contained, Ngoc said market demand would recover, in turn presenting chances for Vietnam to boost exports, including to the US market.
