Board of Governors of the Federal Reserve System

Figure 1. Trade patterns: U.S. and Vietnam imports

Figure 1 illustrates import patterns to the U.S. and Vietnam, demonstrating changing trade patterns with China and other countries over the past seven years.

Figure 1 left panel titled “U.S. Imports by Source” is a line chart comparing annualized U.S. dollar values for China and Vietnam from 2015 through 2025, measured in billions of dollars. China is represented by a solid red line and Vietnam by a dashed blue line. China’s value begins at approximately $460 billion in 2016, rises to about $550 billion in 2018, and then fluctuates substantially. It falls to roughly $340 billion in early 2020, rebounds to a peak of slightly more than $600 billion in 2022, and declines to approximately $420 billion by 2023. After remaining near $460 billion through much of 2024, China’s value drops sharply following the vertical marker labeled “Liberation Day,” reaching roughly $270 billion in early 2026. Vietnam’s value rises gradually from about $40 billion in 2016 to approximately $50 billion at the start of the 2018–2019 tariff hikes. It then increases more rapidly, reaching around $140 billion in 2022, briefly declining in 2023, and rising to approximately $240 billion by early 2026. The gap between China and Vietnam narrows considerably near the end of the period.

Figure 1 right panel titled “Vietnam Imports by Source” is a line chart comparing indexed U.S. imports from China and the rest of the world from 2016 through 2026, with July 2018 set equal to 100. China is represented by a solid red line and the rest of the world by a dotted black line. Both series rise gradually before the start of the 2018–2019 tariff hikes and are near 100 in mid-2018. After 2020, imports from China increase more rapidly, reaching about 170 in 2021 and briefly peaking near 200 in 2022. The China index then falls to approximately 150 in 2023 before rising sharply, reaching nearly 340 by late 2026. Imports from the rest of the world also increase after 2020, reaching about 130 in 2021 and 160 in 2022. After declining to roughly 130 in 2023, the index rises more gradually to approximately 190 by early 2026. The gap between imports from China and imports from the rest of the world widens substantially after 2023.

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Figure 2. Cumulative manufacturing greenfield FDI into Vietnam

Figure 2 illustrates patterns in foreign direct investment into Vietnam broken down by source and sector, demonstrating the increasing investment from South Korea and China.

Figure 2 left panel titled “Total (2010-2025)” is a line chart showing annual cumulative total foreign direct investment into Vietnam from South Korea, China, Taiwan, Japan, the United States, Singapore, and other sources from 2010 through 2025, measured in billions of U.S. dollars. South Korea, represented by a dashed black line, is the largest source throughout most of the period. Its value rises from less than $1 billion in 2010 to about $19 billion in 2017, remains relatively flat through 2020, and then increases sharply to approximately $33 billion by 2024 and 2025. China, represented by a solid red line, increases from less than $1 billion in 2010 to about $7 billion in 2019, remains near $8 to $9 billion through 2022, and then rises rapidly to approximately $21 billion by 2025. FDI from other sources, shown by a dotted purple line, increases to about $9 billion by 2025. Taiwan and Japan each reach roughly $6 billion by 2025, while FDI from the United States rise more gradually to about $4 billion. Singapore remains near zero for most of the period and increases slightly by 2025. Overall, South Korea and China account for the largest and fastest-growing FDI values near the end of the period.

Figure 2 right panel titled “Sectoral breakdown (2018-2025)” is a horizontal stacked bar chart showing foreign direct investment from China, South Korea, Taiwan, Japan, the United States, and other sources, measured in billions of U.S. dollars. Each bar divides FDI into high-tech electronics and equipment, information technology and communications, and manufacturing and industrial goods. China has the largest total, at approximately $17 billion, split between about $9 billion in manufacturing and industrial goods and $8 billion in high-tech electronics and equipment. South Korea follows at roughly $14 billion, with most FDI in high-tech electronics and equipment, a smaller information technology and communications segment, and very little manufacturing and industrial goods. Taiwan totals about $3.5 billion and is also dominated by high-tech electronics and equipment. Japan totals slightly more than $3 billion, with most FDI in manufacturing and industrial goods. The United States totals about $2 billion, divided mainly between high-tech electronics and equipment and manufacturing and industrial goods. Other sources account for nearly $7 billion, most of which is manufacturing and industrial goods. Overall, China and South Korea are the two largest sources, while the composition of FDI differs substantially across countries.

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Figure 3. Vietnam’s goods trade by ownership type

Figure 3 illustrates patterns in goods trade by ownership type over time, demonstrating the increasing presence of Chinese foreign direct investment firms.

Figure 3 left panel titled “Share of Exports to the U.S.” is a grouped bar chart comparing the percent shares of Vietnam’s exports to the United States by Chinese foreign direct investment firms, other foreign direct investment firms, and domestic firms across two periods: 2018–2019 and 2020–2023. Chinese FDI firms are represented by red bars, other FDI firms by blue bars, and domestic firms by green bars. In 2018–2019, Chinese FDI firms account for 11.2 percent of exports, other FDI firms for 56.2 percent, and domestic firms for 32.6 percent. In 2020–2023, the share from Chinese FDI firms rises to 25 percent of exports, while the share from other FDI firms declines slightly to 52.2 percent and the share from domestic firms falls to 22.7 percent. The largest change between the two periods is the increase in the share from Chinese FDI firms, accompanied by a decline in the share of domestic firms.

Figure 3 right panel titled “Share of Imports from China” is a grouped bar chart comparing the percent shares of Vietnam’s imports from China by Chinese foreign direct investment firms, other foreign direct investment firms, and domestic firms across two periods: 2018–2019 and 2020–2023. Chinese FDI firms are represented by red bars, other FDI firms by blue bars, and domestic firms by green bars. In 2018–2019, Chinese FDI firms account for 11.4 percent of imports, other FDI firms for 42.6 percent, and domestic firms for 46 percent. In 2020–2023, the share from Chinese FDI firms rises to 22.1 percent of imports, while the share from other FDI firms increases slightly to 43.8 percent and the share from domestic firms declines to 34.2 percent. The largest change between the two periods is the increase in the share accounted for by Chinese FDI firms, accompanied by a substantial decline in the share of domestic firms.

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Figure 4. Vietnam’s goods trade by firm ownership: existing and new FDI

Figure 4 illustrates patterns in goods trade by ownership type and existing and new foreign direct investment firms, highlighting trade flows between China, Vietnam, and the United States.

Figure 4 left panel titled “Share of Exports to the U.S.” is a grouped bar chart comparing the percent shares of Vietnam’s exports to the United States by existing and new foreign direct investment among Chinese FDI firms and other FDI firms. Existing FDI is represented by orange bars and new FDI by purple bars. Among Chinese FDI firms, existing FDI accounts for 26.4 percent of exports, while new FDI accounts for 43.7 percent. Among other FDI firms, existing FDI accounts for 14.2 percent of exports and new FDI accounts for 21.5 percent. For both groups, the share from new FDI exceeds the share from existing FDI. Chinese FDI firms have higher shares than other FDI firms in both categories, with the largest difference appearing for new FDI.

Figure 4 right panel titled “Share of Imports from China” is a grouped bar chart comparing the percent shares of existing and new foreign direct investment among Chinese FDI firms and other FDI firms. Existing FDI is represented by orange bars and new FDI by purple bars. Among Chinese FDI firms, existing FDI accounts for 59.0 percent of imports, while new FDI accounts for 70.6 percent. Among other FDI firms, existing FDI accounts for 24.6 percent of imports and new FDI accounts for 37.8 percent. For both groups, the share from new FDI exceeds the share from existing FDI. Chinese FDI firms have substantially higher shares than other FDI firms in both categories, with the largest difference appearing for existing FDI.

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