Vietnam firms anticipate robust export opportunities from President Biden's visit

Vietnam's wood, farm produce and other products are waiting for opportunities to expand their exports to the U.S. after President Biden's visit.

U.S. President Joe Biden will make a state visit to Vietnam from September 10–11 at the invitation of Party General Secretary Nguyen Phu Trong, the Southeast Asian country's top leader, as the two countries celebrate the 10th anniversary of their comprehensive partnership. This will be the president's first visit to Vietnam since he took office in early 2021.

More export opportunities

A spate of Vietnamese staples are expected to see export increases following President Biden's visit. According to Vietnam’s General Department of Customs, in the first seven months of the year, shipments of wood and wood products to the U.S. reached $3.9 billion, accounting for 54% of the entire industry's exports. The U.S. has been the largest market for these products from Vietnam for years.

Nguyen Chanh Phuong, vice chairman of the Handicraft and Wood Industry Association of HCMC (HAWA), told The Investor that when the bilateral relationship is in good shape, businesses will benefit from positive sentiment of the two countries' peoples. Besides, trade barriers will also be lowered.

Phuong noted that Vietnam believes in the stability and development of the U.S. market. U.S. inflation will decrease, and purchasing power will increase again. Phuong also said that during Biden’s visit to Vietnam, there will be big furniture-buying corporations accompanying him, such as Cosco and Dollars General.

"This is an opportunity for Vietnam’s furniture industry. Thereby, U.S. firms will also lower standards for importing from Vietnam, such as quality management, social responsibility, security, and the environment," Phuong said.

Tran Lam Son, deputy general director of Thien Minh Import-Export Co., Ltd., expected many large U.S. furniture enterprises to come to Vietnam and visit furniture manufacturing hubs after Biden's visit. Thien Minh specializes in outdoor furniture products made from planted wood and exported to many markets, of which exports to the U.S. have the lion's share.

Meanwhile, the U.S. has been Vietnam's largest shrimp import market for the past seven months. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam's shrimp exports to the U.S. in the period were $375 million, accounting for 20% of its total shrimp exports.

Ho Quoc Luc, chairman of major exporter Sao Ta Food JSC, said political factors will have a spillover effect on the economy, arguing that good bilateral relations will help boost their bilateral trade.

Nguyen Dinh Tung, vice chairman of the Vietnam Fruit and Vegetable Association and general director of Vina T&T Group, also said that exports of fruit and vegetables to the U.S. market have recently shown promising results. The U.S. market officially started receiving Vietnamese grapefruit at the end of last year, and coconuts were also introduced to the U.S. around a month ago.

The sound state of relations between Vietnam and the U.S. will continue to generate opportunities for Vietnamese fruits to enter that market. Passion fruit could be added to the list of fruits allowed for export to the U.S. in the near future, according to Tung.

Regarding Vina T&T Group, the U.S. is the firm's most important export market. Vina T&T earned a revenue of $73 million from the U.S. market in 2022. In the company's development strategy, sales to the U.S. are expected to increase by 20% this year, but they could increase much more in reality because Vietnamese coconuts have been approved to enter the market.

Bilateral trade jumps since 1995

According to the General Statistics Office, bilateral trade between Vietnam and the U.S. has skyrocketed more than 270 times since 1995, when the two nations normalized relations, from $450 million in 1995 to $124 billion in 2022.

Over the past 10 years of the comprehensive partnership, two-way trade turnover has increased by more than four times, from $29 billion in 2013 to nearly $124 billion.

Among Vietnamese goods exported to the U.S. in 2022, there were four groups with a turnover exceeding $10 billion. They were miscellaneous machinery, equipment and spare parts; textiles; computers, electronic products and components; and phones and accessories. Many items with export turnover in the range of $1 billion to less than $10 billion are exported to the U.S. such as footwear, wood and wood products, seafood, iron and steel.

In the eight months through August, the U.S. was Vietnam's largest export market with $62.3 billion, the General Statistics Office. Meanwhile, Vietnam spent $9.3 billion to import goods from the U.S. The U.S. has been Vietnam's second-largest trade partner for the past eight months with $71.6 billion.