The Ministry of Industry and Trade (MoIT) expected a moderate growth for Vietnam’s exports at the remaining months of 2019, mainly due to the negative impacts from trade conflicts between the US and China, and that between Japan and the Republic of Korea.
The ministry made the move following uncertainties caused by the US – China trade war which have been featured over the past months.
Indeed, international organizations such as the International Monetary Fund (IMF) and the World Bank have warned of a slowing down in global economic growth, especially with both China and the US being major economic partners of many countries in the world.
On August 27, the People’s Bank of China (PBOC) devalued the Chinese yen to a 11-year low of 7.081 to the US dollar, a move the MoIT said could relieve pressure for Chinese exports from US tariffs.
However, a weaker Chinese Yen would cause difficulties for Vietnam’s exports and potentially widen the country’s trade deficit with China in the coming time. In this context, prices of Vietnam’s exports to China would be higher.
Meanwhile, Vietnam’s agricultural exports are predicted to face numerous challenges, as countries around the world are shifting their focus on promoting domestic agricultural production instead of importing from others, added the MoIT.
The MoIT stated most Vietnamese agricultural products are under fierce competition, while major importers of such products from Vietnam, including the US, EU, China, Japan and the Republic of Korea (RoK) are stepping up trade protection measures for their own products.
An escalation in a trade dispute between Japan and the RoK regarding the former imposing export restriction to three key high tech materials for semi-conductor production on the latter have seriously impacted production facilities of South Korean companies in Vietnam.
The MoIT is closely monitoring the situation to minimize any possible impact to Vietnam’s trade, said Do Thang Hai, deputy minister of Industry and Trade.
Vietnam’s exports in August reached US$24.5 billion, up 6.6% month-on-month. Of the total, exports from the domestic sector was estimated at US$7.34 billion, down 4.9% inter-monthly and that of the private sector at US$17.16 billion, up 12.4%.
Some of Vietnamese exports earned value against the previous month, including coal with an increase of 103.6% month-on-month; phones and parts rose 37.8%, thanks to Samsung increasing production capacity of Galaxy Note 10; while computers and parts increased 8.6%.
In the January – August period, trade turnover stood at US$169.98 billion, up 7.3% year-on-year, which is lower than the growth rates recorded in the same period in 2017 and 2018 (19.9% and 16.7%, respectively).
This, nonetheless, showed strong effort from Vietnam in the context of unfavorable global trade environment, Hai asserted.
Hai predicted the remaining months of 2019 would be the peak season for exports of home appliances, due to high demands in the global market.
Additionally, Vietnam’s exports to the US is expected to gain positive growth as US importers are looking for alternative to Chinese products.
The US Department of Commerce (DOC) on August 21 announced the result of the 13th period of review (POR13) and decided to impose 0% tariff on over 30 Vietnamese shrimp exporters.
According to the MoIT, the US, being known as demanding market for shrimps, would open up more opportunities for Vietnam in other markets. On the other hand, Vietnam’s imports of US shrimp is gradually increasing recently.