Expect US investment to continue on a major scale

Expect US investment to continue on a major scale

To mark 30 years of US-Vietnam diplomatic relations on July 12, Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, talked with VIR’s Thanh Tung about the investment and trade ties between the two economies.

How do you evaluate the process of cooperation between Vietnam and the United States over the past 30 years?

Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi

At present, the United States and Vietnam are very close friends and partners. They’re comprehensive strategic partners. And that friendship is something that many people in both countries thought was once unimaginable.

Now we see American companies and investors active in just about every single sector of Vietnam’s economy. That has helped integrate Vietnam into the global supply chain. It’s created wealth here and created quality jobs, and it has made this country more productive and safer, and people in both countries have benefited tremendously from that.

It was three decades ago that the United States and Vietnam normalised their economic relationship, which seems like a long time ago, but really it’s not. Bilateral trade between the United States and Vietnam was $451 million back then, and now we see it at $150 billion in 2024.

What are your expectations for US investment flows into Vietnam?

Our members bring high-quality products and state-of-the-art technology and good management, good services, and business practices to Vietnam. When we look at our membership, it accounts for billions of US dollars of foreign investment here, tens of thousands of direct Vietnamese jobs, hundreds of thousands of indirect jobs, and a very significant portion of the tax revenue that the government collects here is from our members.

In addition to being one of the top foreign investors here, the United States is Vietnam’s number one export market, and it has been for many years. Vietnam is one of the top 10 trading partners of the United States.

Apple and Nike and hundreds of other US companies are investing and doing business here, and the reason they have done so is for the opportunities in the Vietnamese marketplace, and because it is the right decision for those companies. I expect that is going to continue.

Along with that, we partner with Vietnam to develop high-tech, innovative industries, and we also commit to upholding Vietnam’s labour and environment laws, and to being good corporate citizens.

Our companies are leaders in promoting sustainability and innovation in Vietnam through global business practices that ensure responsible supply chains and combat climate change. We want to partner to develop infrastructure that ensures energy security and facilitates sustainable growth.

Also, we share an interest in developing a globally competitive workforce, creating quality jobs, and investing in the professional development of our Vietnamese team members. This investment has not only helped grow Vietnam’s economy but also helped grow the entire ecosystem of local companies and entrepreneurs here, integrating Vietnam into the global supply chain and helping the country become more productive, efficient, safer, and cleaner.

The United States and Vietnam have reached a deal on reducing US tariffs on Vietnamese goods. How this will affect US investment here in Vietnam?

Vietnam and the US are close to finalising a deal regarding reciprocal tariffs. We hope and expect Vietnam will retain its competitive position in the global supply chain and that trade and investment will keep growing at a fast pace.

Someone asked me that if the United States imposes high tariffs on Vietnam’s goods, does this mean the end of US investment in Vietnam? And I said, no, it does not. As already mentioned, Vietnam is a great place for many different types of companies from many countries to do business.

There are a lot of reasons that they’re here, and they’re not just here because of low costs.

Normally, an investment plan would take a lot of time. You have to come up with plans, do the numbers, and get permission from the government here. That does not happen overnight or in a short amount of time. Nevertheless, plenty of companies have long-term projects and long-term commitments to Vietnam, and those are going to continue.

What do you think will be the best solutions to encourage bilateral trade?

We are entering a challenging period and because the current US administration focuses on trade imbalances, Vietnam should take some necessary actions.

These include purchasing some big-ticket items from the US to help reduce the trade deficit, creating more transparency regarding the origin of goods and increasing local content, and doing much more to solve burdens and barriers faced by American companies and investors here.

I encourage Vietnamese authorities to clarify elements of law that hinder the efficient deployment of foreign investment, and to ensure that any additional administrative burdens in draft laws and regulations be carefully considered and avoided whenever possible.

Vietnam and the US are good friends, and all challenges and problems can be worked out through dialogue and negotiation.

VIR