The anticipated tariffs on Chinese goods by US President-elect Donald Trump are likely to increase containerized imports from Vietnam, Thailand, and South Korea, which have witnessed considerable growth since 2017.
A recent Linerlytica report indicates that in the first 10 months of this year, Vietnam's container exports to the US surpassed 2 million TEUs (twenty-foot equivalent units), more than double the amount from 2017. Additionally, World Customs Organization data reveals that in the second quarter of this year, compared to the second quarter of last year, there was a 41% increase, primarily in manufactured goods, as supply chains continue to diversify away from China.
Vietnam's well-educated labor force and low business costs have made it an appealing location for manufacturing, and its improving diplomatic ties with the US have also been a contributing factor.
However, Linerlytica's data also highlights that Thailand's exports to the US have increased threefold since 2017, reaching approximately 900,000 TEUs in the first 10 months of 2024. In October alone, there was a nearly 25% year-on-year increase, supported by agricultural and food products.
Poonpong Naiyanapakorn, head of Thailand's Trade Policy and Strategy Office, stated yesterday that he is not worried about Mr. Trump's threat of tariffs against the US's three largest trading partners: Canada, Mexico, and China. He mentioned that several US companies are established in Thailand, thus benefiting from exports to the US.
Furthermore, according to Linerlytica, South Korea's containerized exports to the US exceeded 1 million TEUs between January and October, compared to around 600,000 TEUs in 2017.
Although China's share of US imports from Asia has dropped from 70.4% in 2017 to 58.9% this year, it remains the largest source country for containerized imports. However, Vietnam, South Korea, and Thailand are experiencing the most significant growth in volume and market share gains.
It should be noted that Mr. Trump is aware of Chinese manufacturers potentially using Vietnam as a base to evade US tariffs. In 2019, he threatened tariffs on Vietnamese products, prompting the country to import soybeans and aircraft from the US to reduce its trade surplus.
Linerlytica commented, "The planned tariff increases by the incoming US president are currently targeted at Mexico and Canada, with minimal impact on maritime traffic to the US. The threatened 10% tariff on China is also significantly lower than the 60% initially announced, with no indication that the Trump administration is still considering a blanket tariff on all imports into the US.
"This could enhance the outlook for Asian exports, particularly for Vietnam, South Korea, and Thailand, which have seen the most substantial gains over the past six years."