We’re back to the unfortunate news of U.S. and China trade relations. There is no sign of an end in sight. The increased tariffs are beginning to have an obvious impact on the future of manufacturing and trade for both countries. As expected, importers are looking to dodge the tariffs by buying from other options. American imports on Chinese goods have already plummeted nearly 14% compared to a year earlier. Trends that begin now will be crucial for the future of foreign investment, as investors must begin to flip this disturbance in the global supply chain into something positive.
It’s time for investors to get one step ahead and assess new opportunities: the U.S. is shifting its primary supply chain from China to Vietnam. The economy of Vietnam has boosted nearly 10% already due to the shift in production, according to Nomura Holdings, Inc. Currently, Vietnam is the 12th leading exporter of goods to the U.S., expected to rise to 7th by the year’s end. Needless to say, foreign direct investment is increasing in Vietnam at a rapid pace, and economic optimism along with it. As they withdraw from Chinese economy, investors should look into Vietnamese sectors such as manufacturing, energy and of course real estate.
Several of our clients continue to explore Vietnam as a credible and more stable alternative to China for their operations and investments in the region. Southeast Asia, which was already on its path to emergence, seems to be willing and able to handle America’s need for foreign economic dependence. As Vietnam continues to strengthen its infrastructure, it can serve as a viable market option for investors looking for emerging market potential.