International Economic Integration Bulletin

Key Developments and Highlights

Main table of contents

July 2026 witnessed several notable developments against the backdrop of continued positive growth in Vietnam’s trade and investment activities. Total merchandise trade turnover in the first seven months of the year reached USD 659.58 billion, up 28.1% year-on-year, while total registered FDI, including newly registered capital, additional capital and capital contributions and share acquisitions, reached USD 38.06 billion, representing an increase of 58%.

In terms of international economic integration, Vietnam continued to advance its role as CPTPP Chair in 2026, hosting the third CPTPP Senior Officials’ Meeting in Ho Chi Minh City. At the same time, Vietnam–U.S. economic cooperation recorded a new development with the U.S. Food and Drug Administration (FDA) deciding to establish its first ASEAN regional office in Hanoi. Nevertheless, the international trade environment also presented new developments requiring close attention, most notably the United States’ imposition of an additional 12.5% tariff on Vietnamese goods following the conclusion of its Section 301 investigation concerning forced labour.

Meanwhile, procedures for issuing planting-area codes and packing-facility codes are being simplified to facilitate Vietnam’s agricultural exports. At the international level, the entry into force of the UK–India Free Trade Agreement, together with the EU’s amendments to the EU Deforestation Regulation (EUDR) and the United States’ newly announced tariff roadmap for imported pharmaceuticals, further demonstrate the significant changes taking place across the global trade landscape, requiring businesses to remain proactive in monitoring developments and adapting their strategies accordingly.

I. Vietnam’s external trade and investment continued to grow strongly, despite the return of a trade deficit

In the first seven months of 2026, Vietnam’s total merchandise trade reached USD 659.58 billion, up 28.1% year-on-year. Exports amounted to USD 319.53 billion, an increase of 21.7%, while imports rose by 34.8% to USD 340.05 billion, resulting in a trade deficit of approximately USD 20.52 billion.

However, the renewed trade deficit largely reflects expanding investment and production rather than stronger domestic consumption. Capital and intermediate goods accounted for 94.1% of total imports, while consumer goods represented only 5.9%.

Manufacturing and processing remained the principal export engine, generating USD 287.91 billion and accounting for 90.1% of total exports. Foreign-invested enterprises continued to dominate Vietnam’s export sector, contributing approximately 80.1% of total national exports.

Foreign investment also accelerated. As of 31 July 2026, total newly registered, adjusted, and share acquisition FDI reached USD 38.06 billion, up 58% year-on-year. Newly registered capital amounted to USD 21.05 billion across 2,429 projects, while additional capital for existing projects reached USD 10.43 billion.

Manufacturing and processing remained the leading FDI destination. Singapore was the largest investor, followed by South Korea, Hong Kong, China and Japan, reinforcing the continuing relocation of manufacturing capacity and supply chains into Vietnam.

II. Major U.S. trade risk: Vietnamese goods subject to an additional 12.5% tariff under Section 301

One of the most significant developments highlighted in the Bulletin concerns the United States.

On 23 July 2026, the Office of the United States Trade Representative (USTR) announced its final determination in a Section 301 investigation under the Trade Act of 1974 involving 60 economies and policies relating to imported goods allegedly produced with forced labour.

Vietnam was placed in the group subject to an additional tariff of 12.5%, effective from 24 July 2026, except for specified exempted products.

Under Section 301, the measures generally expire automatically after four years unless extended, although USTR may modify or terminate them if relevant circumstances or policies change.

Vietnam rejected the USTR findings, maintaining that they do not fully and objectively reflect Vietnam’s efforts to prevent and eliminate forced labour. Notably, on 22 July 2026, Vietnam also issued Decree No. 292/2026/ND-CP, introducing provisions prohibiting the importation of goods mined, harvested or produced using forced labour.

The risk extends beyond this particular investigation. The United States is also conducting two other Section 301 investigations concerning overcapacity and intellectual property protection. Vietnamese exporters therefore need to pay particularly close attention to trade policy, origin of goods, labour practices, supply-chain traceability and intellectual property compliance.

III. CPTPP enters a new phase of upgrading and expansion

From 20 to 24 July 2026, Vietnam hosted the third CPTPP Senior Officials’ Meeting of 2026 (SOM3) in Ho Chi Minh City as Chair of the CPTPP for 2026.

After more than seven years of implementation, the CPTPP is increasingly moving beyond the implementation of existing commitments and towards the future upgrading of the Agreement.

Members discussed potential enhancements in areas including e-commerce, trade in services, customs procedures and economic cooperation. They also considered applications or expressions of interest from nine prospective economies, including Costa Rica, Indonesia and the Philippines.

Another important direction is the strengthening of CPTPP cooperation with major economic blocs such as the EU and ASEAN, particularly following the establishment of the CPTPP–EU Trade and Investment Dialogue in November 2025.

This indicates that CPTPP may continue to expand both geographically and substantively, particularly in emerging areas of international trade regulation.

IV. European businesses maintain strong confidence in Vietnam

EuroCham’s Business Confidence Index for Q2 2026 reached 79.7 points, almost returning to the 80-point level recorded in Q4 2025.

Approximately 63% of European businesses surveyed positively assessed current business conditions, while 69% expected conditions to improve further in Q3 2026. Significantly, 54% identified Vietnam as a strategic market, while 18% regarded Vietnam as a principal growth driver.

Nevertheless, investors continue to face several structural challenges, including complex administrative procedures, inconsistent implementation of policies among different levels of government, shortages of skilled labour, and concerns regarding the enforcement of intellectual property rights.

Further administrative reform and greater transparency and consistency in policy implementation therefore remain critical to sustaining Vietnam’s attractiveness as an FDI destination.

V. The U.S. FDA establishes its first ASEAN regional office in Vietnam

On 29 July 2026, the U.S. Food and Drug Administration announced the establishment of its first ASEAN regional office in Hanoi.

The move represents an important development in Vietnam–U.S. cooperation concerning food, pharmaceuticals and agricultural products.

The office is expected to facilitate cooperation in food safety risk management, inspections, traceability, export certification, laboratory data sharing, technical information and regulatory updates.

For Vietnamese businesses, the FDA’s direct presence in Hanoi may provide earlier access to new U.S. technical standards and regulatory requirements, potentially helping exporters prepare for compliance more effectively.

International Economic International Economic

VI. Significant simplification of procedures for planting-area and packing-facility codes

On 31 July 2026, the Government issued Resolution No. 36/2026/NQ-CP, substantially simplifying administrative procedures for the issuance of planting-area codes and packing-facility codes.

Application dossiers are significantly reduced, with the application form becoming the principal required document, while procedures are moved online and linked with national land databases.

Importantly, administrative authority is further decentralized to commune-level People’s Committees, while the regulatory approach shifts more clearly from pre-approval inspections towards post-licensing supervision.

Where an importing market does not require an on-site inspection before a code is granted, the authority may issue the code first and conduct a post-inspection within a maximum period of three months.

This reform is particularly important for agricultural exporters as China, the United States, the EU and other major markets increasingly impose stringent requirements relating to traceability, food safety and plant quarantine.

VII. Trade remedy activity continued to intensify

July 2026 saw several major trade remedy developments affecting both imports into and exports from Vietnam.

Vietnam initiated an anti-dumping investigation concerning prestressed steel bars and rods originating from China (AD24). It also imposed an anti-circumvention duty of 27.83% on certain hot-rolled steel products originating from China.

At the same time, Vietnamese exports continued to face investigations abroad.

The United States issued final determinations in anti-dumping and countervailing duty investigations involving concrete reinforcing bar and hardwood and decorative plywood imported from Vietnam.

Malaysia also initiated an anti-dumping investigation concerning aluminium-zinc coated steel products originating from Vietnam, China and Taiwan.

These cases underline the fact that trade remedies are becoming an increasingly regular commercial and regulatory risk for Vietnamese exporters.

VIII. Three major international developments to watch

First, the United States announced a prospective tariff roadmap for imported generic pharmaceuticals. Under the announced plan, generic medicines would remain subject to a 0% tariff for two years from 1 August 2026, followed by a proposed tariff of 100% from August 2028 and 200% from August 2029.

The Bulletin emphasizes, however, that this remains a presidential announcement and has not yet been implemented through a formal executive order or other legally binding instrument.

Second, the United Kingdom–India Comprehensive Economic and Trade Agreement (CETA) entered into force on 15 July 2026.

The UK will reduce or eliminate tariffs on 99% of tariff lines covering Indian products, while India will provide preferential treatment for approximately 90% of tariff lines covering UK products. The two countries aim to increase bilateral trade from approximately USD 55 billion in 2025 to USD 100 billion by 2030.

For Vietnam, the agreement is relevant because Indian goods will increasingly compete with Vietnamese exports in the UK market, particularly in textiles and garments, footwear, seafood and processed food.

Third, the EU introduced further amendments to the EU Deforestation Regulation (EUDR).

Certain products, including some cattle hides, leather and rubber products, have been removed from the scope, while instant coffee and several other products have been newly included. Newly added products will become subject to EUDR requirements from 30 December 2027.

Although direct legal obligations under the EUDR generally fall on EU operators and traders, Vietnamese exporters will in practice be required to provide sufficient information and evidence for their EU customers to complete the required Due Diligence Statement (DDS).

The core EUDR requirements are that relevant products must be deforestation-free, produced in accordance with the applicable laws of the country of production, and covered by an EUDR due diligence statement.

Overall assessment

The central message of the July 2026 Bulletin is that international economic integration is increasingly moving beyond traditional market access and tariff preferences towards trade-risk management and supply-chain compliance.

Vietnam continues to benefit from strong FDI inflows and expanding international trade. At the same time, businesses face three increasingly important categories of risk: tariffs and trade remedies; labour, origin and supply-chain requirements; and green, sustainability and traceability standards.

Accordingly, the developments that Vietnamese businesses should monitor particularly closely in the coming months include the U.S. Section 301 investigations, trade remedy proceedings in major export markets, the possible upgrading and enlargement of the CPTPP, and emerging compliance regimes such as the EUDR.

These developments are likely to have direct implications for Vietnamese companies’ export strategies, investment decisions, market diversification, compliance systems and supply-chain structures throughout the second half of 2026.