(Bloomberg) -- Vietnam overtook Japan as China’s third-largest export destination for the first time, as US tariffs force companies to find new suppliers to avoid levies while continuing to rely on Chinese manufacturers for components.
Most Read from Bloomberg
-
Ambitious High-Speed Rail Plans Advance in the Baltic Region
-
New York, San Francisco Ranked Worst for US Traffic in City Centers
China’s exports to Vietnam in 2024 rose almost 18% to a record $162 billion, according to data released by China’s customs administration on Monday. That surpassed the $152 billion in shipments to Japan, previously the third-largest market for Chinese exporters.
The jump was driven mostly by a surge in exports of parts to the Southeast Asian nation, where they are assembled and then exported to the US and elsewhere. Electronics components including screen modules and computer memory made up eight of the ten fastest-growing exports, according to Chinese data through November 2024.
The rerouting of trade risks raising costs for businesses and consumers but has benefited Vietnam, which has seen a surge of investment as companies look to diversify supply chains from China. Leading electronics makers such as Samsung Electronics Co., Luxshare Precision Industry Co. and Hon Hai Precision Industry Co. have invested billions of dollars in Vietnam in recent years to assemble products such as AirPods and MacBooks.
The AI boom and US export restrictions targeting AI chips have similarly boosted investment in Vietnam while keeping China in the game.
Hon Hai started making Nvidia’s AI graphics cards at its subsidiary in Vietnam last year, with key parts including integrated circuits and printed circuit boards sourced from China, according to data from NBD, a private customs data provider.
Most of the finished products were shipped to American customers, driving up Vietnam’s trade surplus with the US to a record in the year through November. This may put the country in the crosshairs of President-elect Donald Trump, who has spoken of the need to balance trade with Vietnam and in 2019 called it a trade “abuser.”
The US has already pushed back against this trend, with the Biden administration imposing tariffs on solar panels made in Vietnam and three other Southeast Asian nations late last year. Most of the panels were made by Chinese companies that had invested in those countries, partly to circumvent US tariffs.
Most Read from Bloomberg Businessweek
-
He Built Russia’s Biggest Tech Company. Now He’s Starting Over—Without Putin
-
Why AI Investors Should Worry About the Self-Driving Car Crash
-
How Athletic Sparked the Nonalcoholic Beer Boom With Brews That Don’t Suck
-
The US Government Is Sitting on a Possible Solution to the Housing Crisis
©2025 Bloomberg L.P.