Vietnam trade deficit could balloon to $3 billion

The volatility of trade policies of major economies like the U.S. and EU could hurt Vietnam’s exports this year, Deputy Minister of Industry and Trade Hoang Quoc Vuong said at a recent review conference.

Geopolitical tensions and monetary policies which were tightened earlier than expected in many economies are other challenges for Vietnam’s export sector this year, he added.

Global agricultural supply this year is expected to rise as countries hike up production of own agriculture sectors to avoid reliance on imports, and competition for agricultural and seafood products is set to intensify.

Meanwhile, imports are forecast to continue to grow in manufacturing sectors that rely on imported materials or machinery.

“Trade protection looks to be on the rise, especially after the U.S. has raised tariffs on imports from other countries. The US-China trade war is also not showing signs of cooling down,” Vuong said.

Nguyen Xuan Cuong, Minister of Agriculture and Rural Development, said at the conference that 2019 was going to be a more difficult year after 2018’s windfall.

“We’ve hit very high targets last year, so going even higher is extremely difficult. In addition, world trade is unstable, U.S.-China trade relations have not returned to normal, and Brexit remains unfinished. These are difficult challenges for our industrial and agricultural sectors this year,” said Cuong.

He suggested that the Ministry of Industry and Trade supports growth in the agricultural sector, using its influence on supply chain areas like marketing and distribution.

Vietnam had an export surplus of $7.2 billion in 2018, three times higher than that of 2017 and the highest in the past decade.