Opportunities for Vietnamese businesses from the shift in US production chains

Recently, Apple has increased the number of partners with factories in Vietnam. Photo: ST

Vietnam is an important market for the United States

According to the European-American Market Department, the economic and trade pillar between Vietnam and the United States is expected to grow even stronger in the future, especially when the two countries upgrade their relationship to a comprehensive strategic partnership on September 10, 2023. Currently, the United States is very interested in industries where Vietnam can participate in the global supply chain and value chain such as automobile manufacturing, semiconductors, cosmetics, internet, legal services, education, and aviation; many US companies are still promoting supply chain shifts into Vietnam. This trend will continue to increase in the future.

Mr. Adam Sitkoff, Executive Director of the American Chamber of Commerce in Hanoi, said that if we only look back to 1994, when the embargo was lifted and the two countries began to establish normal relations, then, business activities between the two countries are only at a very low level of less than USD 500 million per year. But up to now, bilateral trade relations have increased to about USD 125 - 130 billion. Vietnam became the 73rd largest trading partner of the United States, while the United States is the largest export market for Vietnamese goods. In particular, recently, Vietnam has become an important market for US businesses and investors. “I feel very proud when companies like VinFast, Trung Nguyen, Vietnamese chocolate products, or Vietnamese fruits appear in supermarkets in the United States. I think that's just the beginning we will see in increasing trade and investment between the two countries," said Mr. Adam Sitkoff.

Mr. Adam Sitkoff said that if we look forward to the future and talk about specific areas of cooperation, the United States is the largest economy in the world and is interested in Vietnam in all fields such as automobiles, Cosmetics, internet, legal services, education or aircraft are manufactured in Vietnam... Many US companies are continuing to promote supply chain shifts in Vietnam. For example: Apple is increasingly expanding its operations in Vietnam. Similarly, every commercial aircraft that Boeing sells anywhere in the world contains at least one component produced in Vietnam. This trend is predicted to continue to increase in the future.

Catch the wave with high-tech human resources

From a business perspective, Mr. Vu Tu Thanh, Deputy Executive Director of the United States-ASEAN Business Council (USABC), assessed that through observation, the United States wants to promote exports, energy, digital economy, product services, green energy transition, healthcare, agriculture and traditional products such as aircraft, turbines, electronics... In the future, the opportunities opening up for Vietnam are potential. Especially with trade facilitation that will help reduce the cost of exporting goods to the United States, Vietnamese businesses can take advantage of opportunities in the near future.

Suggesting investment and trade cooperation between Vietnam and US enterprises, Mr. Vu Tu Thanh said that the Vietnamese Government has many programs to support the promotion of the semiconductor industry and promote the transfer of technology and investment attraction. However, according to Mr. Vu Tu Thanh, Vietnam has some advantages in developing the semiconductor industry but there are still many big challenges, especially a lack of human resources. “Currently we have about 5,000 IC engineers. To attract investment, we need to train a lot more, at least 5 times the current amount; meaning about 25,000 engineers are needed in the next few years. We have human resources for training, but we cannot answer where to practice, and where are the jobs. The United States can answer this problem and help Vietnamese students practice," Mr. Vu Tu Thanh said, giving an example of what Intel has done by mobilizing relevant partners to train and participate in their training project. Human resources will be ready when US businesses open investment in Vietnam.

To promote trade and investment in Vietnam, Mr. Adam Sitkoff said, many businesses have come with an interest in investing in Vietnam. The US tariff system is very strict, making US businesses concerned about having to return a portion of profits when brought back from another country. This may cause US businesses to choose to retain these profits in Singapore, Vietnam, or certain European countries. “Therefore, the necessary issue right now is an open legal system. If there was a system to promote a positive image of Vietnam to foreign investors, it would be a great thing. A fair society where everyone enjoys rights and benefits will attract more foreign investors to Vietnam than other countries," Mr. Adam Sitkoff said.