Vietnam moves to curb surging imports as trade deficit tops $20.3bn in January-July

Permanent Deputy Prime Minister Pham Gia Tuc chaired a meeting on Wednesday to review measures to promote exports and control the trade deficit, the Vietnam Government Portal reported.

Authorities will inspect and monitor foreign-invested companies with large import turnovers and businesses whose imports have risen sharply.

According to the Ministry of Industry and Trade, Vietnam’s total trade turnover reached approximately $659 billion in January-July, up 28.1 percent year on year.

Exports totaled $319.7 billion, rising 21.7 percent. If no major adverse developments occur, annual export turnover could grow by around 15-16 percent.

The foreign-invested sector recorded approximately $255.1 billion in trade turnover, up 26.5 percent, while domestic businesses accounted for around $64.6 billion, an increase of 5.8 percent.

However, the country ran a trade deficit in the period.

Exports of some major product groups, including textiles and garments, footwear, and wood and wood products, grew slowly, while some agricultural exports declined in value.

Meanwhile, imports of computers, electronic products and components surged, mainly to serve manufacturing and investment expansion in Vietnam.

Business associations and companies said logistics, raw material and compliance costs continued to weigh on exports.

Trade defense measures, unilateral trade policies and increasingly stringent green standards have also created additional challenges.

The electronics industry is among the sectors with the largest import turnovers.

Do Thi Thuy Huong, vice-chairwoman of the Vietnam Electronics Industries Association, called for stronger development of supporting industries and greater support for companies in technological innovation, automation and artificial intelligence applications.

She also called for stronger links between Vietnamese businesses and foreign-invested corporations to help domestic companies participate more deeply in global supply chains.

Government seeks to boost exports, monitor surging imports

Deputy PM Tuc said controlling the trade deficit must begin with a strong push to boost exports. Achieving a trade balance will require a substantial increase in exports, while export markets remain subject to considerable uncertainty.

He asked ministries, agencies and localities to focus on removing obstacles, capitalizing on market opportunities, boosting exports and improving the trade balance in the remaining months of the year.

The government will develop an ecosystem to help businesses expand into international markets and gain direct access to global distribution systems and retail chains.

It will also accelerate negotiations on free trade agreements, capitalize on strong demand for products such as electronics, machinery, agricultural goods and seafood, and expand into markets with further growth potential.

The government will continue removing procedural and resource-related obstacles for businesses, including reviewing value-added tax refund procedures, speed up the processing of applications from compliant businesses, and provide clearer guidance on outstanding issues.

The State Bank of Vietnam is tasked with ensuring that exporters have access to credit, prioritizing funding for the purchase, processing and export of agricultural products in the remaining months of the year, while maintaining appropriate interest rate policies for export-related sectors.

Efforts to control the trade deficit must also be linked to stronger domestic production.

The Ministry of Industry and Trade was asked to work with companies with large disparities between their import and export turnovers, particularly those in the computer and electronic component sectors, to clarify the reasons for their imports and assess their production and export progress in Vietnam.

The ministry was also asked to review industrial products that can already be manufactured domestically and propose appropriate tax policy adjustments, while developing supporting industries, expanding domestic supply and increasing localization rates.

The ministry will also continue reviewing goods and raw materials that can be produced domestically to reduce dependence on imports.