Vietnam's Trade in 2026: Record Volumes, FTA Milestones, and the SME Utilization Gap

Macroeconomic Momentum

The country's GDP grew 8.18% year-on-year in H1 2026, with Q2 alone reaching 8.39% — the highest second-quarter rate since 2011 . Q1 2026 grew 7.83% . Prime Minister Phạm Minh Chính has set an ambitious 10% annual GDP growth target for 2026 . The World Bank projects a more moderate 6.8% growth, citing a Middle East oil shock weighing on global demand . Actual H1 growth sits between these two figures.

Record Trade Volumes

• H1 2026: Total merchandise import-export turnover reached $549.69 billion, up 27.1% year-on-year .
• January–July 2026: Trade hit approximately $659 billion, a 28% increase over the same period in 2025 .
• Trade balance: Vietnam recorded a trade deficit of $16.65 billion in H1 2026, driven by strong import demand for machinery and production inputs rather than consumer goods .

The EVFTA Effect: Six Years In

Six years after taking effect on August 1, 2020, the EU-Vietnam Free Trade Agreement (EVFTA) has fundamentally reshaped bilateral economic ties . The results are striking:

• Bilateral trade surge: Cumulative Vietnam-EU trade from 1995 to June 2026 surpassed $900 billion. Of that, $383.8 billion — 42.6% — was generated in just the six years since the EVFTA took effect .
• H1 2026 alone: Bilateral trade reached $41.4–$41.7 billion, with Vietnam exporting $31.8 billion to the EU and importing $9.7–$9.9 billion, yielding a trade surplus of roughly $22 billion . This six-month surplus exceeds the full-year surplus of $21.7 billion recorded in 2019, before the agreement took effect .
• Exports to EU: In the first five months of 2026, exports to the EU reached $25.78 billion, up 13.3%, making the EU Vietnam's largest trade surplus market .
• C/O utilization: The EVFTA preferential certificate of origin (C/O) utilization rate rose sharply from 14.8% in the first year to 35.1% in 2024 . EuroCham reports that 68% of European businesses are already involved in Vietnam-EU trade .

FTA-Backed Exports: $100 Billion Milestone

As of July 2026, more than 1.2 million certificates of origin had been issued under various FTAs, covering exports worth nearly $100 billion — equivalent to 28% of Vietnam's total export value . Several FTAs recorded preferential tariff utilization rates of 30–50% .

Vietnam has concluded and implemented 17 FTAs and recently completed negotiations with the European Free Trade Association (EFTA) . Between 2016 and 2025, the country's total trade turnover increased 2.7-fold, from $176 billion to $475 billion . Agreements including the CPTPP, RCEP, and bilateral pacts with ASEAN partners, India, Australia, New Zealand, South Korea, and Japan have driven export diversification and supply chain shifts toward higher-value manufacturing and processed goods .

The FTA Utilization Gap: Large Firms vs. SMEs

Despite this broad FTA network, only 30–40% of exporting businesses take advantage of the tariff preferences available to them . This leaves 60–70% of tariff incentives unexploited .

Small and medium enterprises (SMEs) face several key barriers:

• Dependence on large markets (US, China)
• Low localization rates requiring many imported inputs, making rules-of-origin compliance difficult
• Lack of awareness of FTA rules and high compliance costs for documentation
• Increasing pressure to comply with international environmental, labor, and intellectual property standards

Large corporations with dedicated trade compliance teams achieve much higher utilization rates, while the majority of SMEs remain on the sidelines . The Ministry of Industry and Trade launched the FTA Index in April 2024 to better measure and narrow this gap at the local and provincial level .

Key Caveats

The $22 billion H1 trade surplus with the EU is bilateral — it is not Vietnam's overall trade balance. The country's overall trade balance was a deficit of $16.65 billion in H1 2026 . The $1 trillion full-year target remains a projection that would require continued strong performance in H2 2026 .