Vietnam posts $114 billion goods trade surplus with US in first half of 2026, topping China and Mexico

US imports from Vietnam jump 40% as tariff gap — 23.2% on Chinese goods vs. 6.5% on Vietnamese — drives production shift

Apple, Nike among global firms moving supply chains from China to Vietnam; transshipment concerns linger

A Vietnamese flag flutters in the wind. Vietnam surpassed China, Mexico and other countries in the first half of this year to record the largest goods trade surplus with the United States. [Bloomberg]
A Vietnamese flag flutters in the wind. Vietnam surpassed China, Mexico and other countries in the first half of this year to record the largest goods trade surplus with the United States. [Bloomberg]

Donald Trump's tariff war has upended the landscape of America's trade deficits. High tariffs targeting China pushed global companies to shift production to Vietnam, and the Southeast Asian nation surpassed China, Mexico and others in the first half of this year to post the largest goods trade surplus with the United States. The shift is striking given that Vietnam's economy is roughly one-quarter the size of Mexico's.

According to the Wall Street Journal, US federal government data show Vietnam's goods trade surplus with the United States reached $114 billion in the first half of this year, topping Taiwan, Mexico and China to become the country with the largest goods trade surplus against the US.

Just one year after Trump set out to reshape the global trade order in America's favor through tariffs, Vietnam has emerged as the biggest beneficiary.

At the heart of the shift is a wide tariff gap between China and Vietnam.

According to the Penn Wharton Budget Model, the effective tariff rate the United States applied to Chinese imports as of June reached 23.2 percent — more than three times the global average effective rate of 7 percent. By contrast, the effective tariff rate on Vietnamese products was limited to 6.5 percent.

For companies, exporting the same product to the United States now carries a far heavier tariff burden when manufactured in China than in Vietnam.

In response, global companies including Apple, Nike and Lululemon rapidly diversified their production networks away from China and toward Vietnam. As mid-sized and smaller manufacturers joined the trend alongside major corporations, the so-called "China Plus One" strategy accelerated.

TOV Furniture, a Miami-based furniture company, is a prime example. As recently as 2024, it sourced 60 percent of its products — sofas, beds and the like — from China and 25 percent from Vietnam.

Now the proportions have reversed. China's share has fallen to 25 percent while Vietnam's has risen to 60 percent. "We moved our production purely because of tariffs," said Bruce Krinsky, founder of TOV Furniture.

The volume of Vietnamese goods entering the United States has surged sharply.

US imports of Vietnamese goods in the first half of this year reached $123 billion, jumping 40 percent from the same period last year. That six-month total has already surpassed the full-year 2023 figure of $114 billion.

Vietnam has not, however, become the largest source of US goods imports overall. Mexico and Canada still account for the largest share of total US imports, with Taiwan and China also ahead of Vietnam in that measure. Vietnam tops the rankings on goods trade surplus because it exports far more to the United States than it buys from it.

Vietnam's rapid rise has also fueled allegations that Chinese goods are increasingly being routed through Vietnam to avoid tariffs. Critics argue that while the Trump administration raised tariff barriers targeting China, the overall effect on reducing the US trade deficit has been limited because only the production location or export route has changed.

In Vietnam, however, there are counterarguments that the recent surge in exports cannot be explained by simple transshipment of Chinese goods alone.

Mark Gillin, president of the American Chamber of Commerce in Vietnam, said about 60 percent of Vietnam's exports to the United States consist of machinery, electronics and home appliances, and that global companies with actual production facilities in Vietnam — including Samsung Electronics, Intel and Foxconn — are driving the export growth.


sjy@heraldcorp.com