Vietnam Trade Deficit Widens on Import Surge

The trade data point to a rapidly expanding economy, but one with a heavy import content in production. Imports rose 35.3% in the period, far outpacing export growth of 22.4%, according to the Fulbright public policy lecturer Đỗ Thiên Anh Tuấn. Public investment disbursement climbed 18.5%, realized FDI rose 12% and registered FDI jumped 55.4%, all of which drove demand for equipment and industrial inputs.

The structure of that growth is what has markets watching closely. Industrial production rose 11.9% in the eight months, among the strongest readings in years, but much of the output is tied to electronics, computers, machinery and other assembly-heavy sectors that rely on imported parts. Electronics and computer goods alone generated a $60.6 billion trade deficit in the period, underscoring how much of Vietnam’s export success is embedded in imported supply chains rather than local value added.

Energy and industrial materials are adding to the bill. Vietnam posted large deficits in oil products, plastics, coal, crude oil and chemicals, all of which feed manufacturing, transport and power generation. That means the trade gap is not mainly a consumer story, but a consequence of investment-led expansion.

The split between foreign and domestic firms is another critical piece of the narrative. Foreign-invested companies exported $300.37 billion in the period, up 26.9%, and still ran a $10.14 billion surplus. Domestic firms exported just $74.47 billion, up 7.4%, and posted a $30.6 billion deficit. In other words, Vietnam’s trade balance is being shaped by a strong FDI sector and a much weaker local industrial base.

That is why the current deficit can be read in two ways. On the bullish side, some of the import growth is “healthy” — tied to machines, parts and intermediate goods needed to build factories and raise future output. On the bearish side, the figures show local supporting industries and localization rates have not kept pace with the pace of expansion, especially in electronics, semiconductors, AI and data-center investment, all of which require large imported inputs.

There are signs the monthly trade position is improving. After a $3.59 billion deficit in July, August’s shortfall narrowed to just $120 million, suggesting the gap may be peaking as earlier imports work through production. Export growth also accelerated to 26% in August, while imports fell 3.1% from July, pointing to a possible short-term balance reset in the fourth quarter.

Still, a full reversal looks unlikely. With cumulative imports still growing much faster than exports, Vietnam is more likely to end the year with a smaller trade deficit than to swing back into a large surplus. For policymakers, the message is clear: investment-led growth is intact, but reducing dependence on imported inputs will be essential if Vietnam wants a more durable external balance.

For investors, that means watching not just export volumes but where value is created. A larger FDI manufacturing footprint supports long-term growth, but unless domestic suppliers capture more of the chain, the economy will keep exporting more and importing almost as much growth as it creates.