Vietnam Overtakes Japan as China 3rd Largest Export Destination
US President Donald Trump’s latest tariffs on China since returning to office two weeks ago are due to take effect within hours, highlighting the urgency for businesses to diversify their supply chains. This may be good news to Vietnam, which has already capitalized on this trend to overtake Japan as China’s third largest export destination for the first time.
According to data released by China’s Customs Administration, China’s exports to Vietnam in 2024 rose almost 18 per cent to a record US$162 billion, surpassing the US$152 billion in shipments to Japan, previously the third-largest market for Chinese exporters.
Background
As the rivalry between the United States and China over cutting-edge technology simmers and trade restrictions pile up, companies – particularly those in crucial sectors like semiconductors and electric vehicles – are looking to strengthen their supply chains and production capabilities. Vietnam, benefitting from its geographical proximity to China, has become the biggest beneficiary of this trend.
Samsung Electronics is just one of a flood of Western leading electronics companies that have decided to move to or expand operations in Vietnam, investing billions of US dollars in the Southeast Asian nation in recent years to assemble products like AirPods and MacBooks, with parts sourced from the neighbouring China. Chinese data further reveal that electronic components, like screen modules and computer memory, have risen rapidly to comprise eight of the top ten fastest growing exports.
Tariffs
Most of these finished products end up servicing the American domestic market, driving up Vietnam’s trade surplus with the US to a record in the year through November. This may risk putting the country in the crosshairs of President Trump, who has previously spoken of the need to balance trade with Vietnam and in 2019 called it a trade “abuser.”
It is not a Trump promise either. Under the Biden administration, tariffs were imposed on solar panels made in Vietnam, Cambodia, Malaysia, and Thailand in December 2024 to curb Chinese attempts at circumventing US tariffs.
Impact
With the potential for further trade barriers and uncertainty, Southeast Asia presents both challenges and exciting opportunities for Australian companies seeking to secure and expand their operations.
Further Reading: Trump 2.0 – ASEAN Opportunities
The increasing importance of the ASEAN market has a direct, proportional impact on the demand for logistics services in the area. Regardless of air freight or sea freight, the ever rising impetus to deliver faster necessitates services like warehousing, customs clearance, and more.
As Singapore continues to solidify its position as the world’s largest transshipment hub, Australian businesses have a unique opportunity to capitalize on the efficiencies, cost savings, and expanded market access this growth offers.
Further Reading: How Australian Businesses Can Leverage Singapore for Global Trade Success
Freight forwarders with operations in Singapore, like Arc Freights, have a natural advantage when it comes to managing the increasing trade volume between China, Vietnam, and other ASEAN countries. By tapping on the world class logistics infrastructure in place, Australian businesses can benefit from fast, reliable, and cost-effective international freight.
Conclusion
Vietnam has, through overtaking Japan as China’s third largest export destination, demonstrated its importance in global trade. With geopolitical tensions set to take center stage in Trump’s second administration, the need for experienced guidance to navigate the rapidly changing logistics landscape has become increasingly paramount. Arc Freights, specializing in connecting Australia to ASEAN (via Singapore), can serve as a key ally as businesses manage their overseas portfolios.
Arc Freights is Australia’s leading Freight Forwarder offering QUALITY & RELIABLE logistics services in more than 140 countries. Having plied our expertise in ASEAN for nearly two decades, we are the trusted partner for logistics between Australia and Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. With expert knowledge, advanced technology, and a commitment to reliability, we provide seamless logistics management that helps you focus on what matters most—growing your business.
