Vietnam Already Has One Of The Largest Trade Surpluses With The United States

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According to the analysis of Vietnam cotton yarn Association, although the US tariff on Chinese textiles has brought opportunities for Vietnam's textile production, Vietnam is also facing a lot of risks.

Overall, affected by the Sino US trade war, Vietnam's textile and clothing market share in the United States will increase by 1%.

According to the analysis of Vietnam cotton yarn Association, if China and the United States can't reach an agreement by the end of June, and trump will impose tariffs on the remaining Chinese textiles and clothing, Vietnam's textile and clothing has great potential to expand its market share in the United States. In particular, textiles, footwear and other products will seize China's market share in the United States, and American buyers will shift their orders to other countries.

On the contrary, if China and the United States reach an agreement that the United States will not impose tariffs on all Chinese textiles and clothing, Vietnam will also expand its market share in the US textile and clothing imports in the next few quarters.

Vietnam experts believe that since the United States imposed tariffs on Chinese products, Vietnam's textile market share has increased by 0.2%. If the Sino US trade war escalates, Vietnam's share of US textile and clothing imports will increase by 1%, and the export volume will reach US $25 billion, close to 10% of Vietnam's total exports and 25% of Vietnam's exports to the United States in 2018.

Nevertheless, with the expansion of Vietnam's trade surplus with the United States, Vietnam is also facing great risks. Trump is likely to pay close attention to Vietnam's exports to the United States, and then take measures to limit them. In 2018, Vietnam has become one of the countries with the largest trade surplus with the United States, with a surplus of US $36 billion, ranking seventh.

If Vietnam's exports to the United States increase by 25 billion US dollars, Vietnam's trade surplus with the United States will exceed 50 billion US dollars, which may make the United States cancel the GSP treatment to Vietnam, and its danger is self-evident. In the short term, in the coming year, the United States may use Vietnam as a substitute for China and temporarily retain its dominant position in export.

Another risk is that Vietnam needs to import raw material production from China and then export it to the United States. Therefore, if Vietnam's exports increase substantially, the United States will have more stringent scrutiny of the country of origin. Once it is found that the raw materials of the products are from non cptpp countries, the United States may impose sanctions on Vietnamese products. At that time, Vietnam can only strengthen market supervision and management and issue certificates of origin strictly to avoid such risks.