State by State: Vietnam and Virginia Trade
Trade relations between Vietnam and Virginia are growing in importance. Virginia imported US$552 million from Vietnam in 2014, up 17 percent from 2013 and ranking the country in 13th place as an origin of the state’s imports. Between 2011 and 2014, imports from Vietnam as a share of the state’s total imports rose from 1.3 percent to 2.3 percent. In contrast, imports from ASEAN economic giant Indonesia have fallen from 3.0 percent of Virginia’s imports in 2011 to 2.5 percent in 2014.
Virginia’s exports to Vietnam in 2014 totaled US$133 million, up 1.33 percent from 2013. Exports have risen dramatically from US$11.9 million in 2005. Virginia’s top five merchandise exports to Vietnam in 2014 were wood products, agricultural products, food manufactures, textiles and fabrics, and forestry products respectively. Vietnam is the 11th largest export for Virginia’s agricultural exports.
Tariffs in the TPP
When the Trans-Pacific Partnership negotiations are finalized, Virginia businesses will be able to take advantage of reductions in tariffs in the multilateral trade bloc including the U.S. and Vietnam. Virginia may benefit from the reduction in tariffs on exports of frozen chicken cutlets, which faced a 20 percent rate in 2012. Two of the most important tariffs on imports from Vietnam to Virginia are those on man made fiber sweaters and women’s synthetic fiber pants, which in 2013 faced rates of 32 percent and 27.1 percent respectively.
Relations between Virginia and Vietnam are deeper than trade alone. Results from the 2010 U.S. Census showed that Virginia had the fifth largest population of Vietnamese residents, at 53,529. This population had increased in size by 43 percent compared to only a decade earlier.
The Washington-Arlington-Alexandria metropolitan area, which includes parts of Virginia, also has the fifth largest number of Vietnamese residents of any U.S. metropolitan area. Fairfax County was found to contain the ninth highest number of Vietnamese residents of any U.S. county, at 28,770.
High-level dialogue supports closer ties
Virginia’s governor Terry McAuliffe has expressed a desire for closer relations between the two economies. Speaking at a reception for Vietnam’s Ambassador to the U.S. Nguyen Quoc Cuong in the state, McAuliffe said both economies should increase visits and leverage the role of the Vietnamese community in Virginia in deepening relations.
Further Support from Dezan Shira & Associates
Dezan Shira & Associates can service Virginia-based companies that are looking to further develop their operations in Vietnam. The firm can help companies establish a direct office in the country and can guide them through the affiliated tax, legal and HR issues that come with doing so. To arrange a free consultation, please contact our U.S. office at: email@example.com
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
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