Vietnam-UK bilateral trade on the rise
Bilateral trade between Vietnam and the UK has been rising handily in recent years on the back of new agreements and a stronger partnership.
Trade between Vietnam and the UK continued to grow strongly in 2025, supported by tariff preferences under the UK-Vietnam Free Trade Agreement (UKVFTA), rising demand for Vietnamese goods, and broader supply chain shifts. The latest trade and investment factsheet released by the UK Department for Business and Trade on May 14 puts total two-way trade in goods and services at £10.5 billion ($13.5 billion), up 26.5 per cent against 2024. UK exports to Vietnam amounted to £1.8 billion ($2.3 billion), while Vietnam’s exports to the UK climbed to £8.7 billion ($11.2 billion).
The factsheet also showed notable shifts in trade composition. Goods continued to dominate bilateral trade, accounting for 65.6 per cent of UK exports to Vietnam and 94.8 per cent of Vietnam’s exports to the UK, with the latter rising particularly strongly in electronics and manufacturing-related products, including telecoms and sound equipment, office machinery, footwear, and clothing.
Yet officials and trade experts believe Vietnam maintaining its momentum in the UK market will increasingly depend not on low-cost exports but on whether Vietnamese businesses can meet stricter standards, strengthen traceability, and build their long-term competitiveness.
Changing dynamics
The release of the UK figures comes as Vietnamese authorities seek to deepen commercial engagement with the market. At the “Opportunities and Challenges for Market Development in the UK” seminar, held recently in Hanoi, officials emphasized that while bilateral trade still has substantial room for growth, the way Vietnamese firms approach the UK market will need to evolve.
Speaking at the seminar, Mr. Le Hoang Tai, Deputy Director of the Trade Promotion Agency under the Ministry of Industry and Trade, said Vietnam-UK economic and trade relations continue to develop positively on the foundation of the two countries’ Comprehensive Strategic Partnership.
According to Vietnam Customs data cited at the seminar, bilateral trade stood at approximately $9.38 billion in 2025, up 11.3 per cent compared to 2024. Of this , Vietnam’s exports to the UK stood at around $8.39 billion, while imports from the UK reached $991 million. In the first quarter of 2026, two-way trade reached approximately $2.36 billion, suggesting continued stability.
“The trade structure between the two countries remains highly complementary,” Mr. Tai said, pointing to Vietnam’s key export items such as garments, footwear, electronic components, and agricultural and seafood products, while imports from the UK are mainly pharmaceuticals and materials serving domestic production.
He stressed that the UKVFTA continues to serve as an important platform helping Vietnamese goods improve competitiveness in the UK through tariff preferences and trade facilitation. However, businesses can no longer rely on conventional export approaches.
According to Mr. Vu Viet Thanh, Senior Specialist in charge of the UK market at the Department of Foreign Market Development under the Ministry of Industry and Trade, the UK has been reshaping its role in international trade, supply chains, the digital economy, financial services, and green development in the years following Brexit and the Covid-19 pandemic.
He described the UK as a large market with strong purchasing power and deep integration into the global economy. “The UK is not a high-growth market, but it is a market with large scale, strong purchasing power, and strong financial capacity,” Mr. Thanh said. “It is not only an import market for consumer goods, but also a center for services, finance, standards, technology, and distribution.”
This, he said, means Vietnamese businesses should view entry into the UK market as “not only a matter of selling products, but also of meeting standards, building stable supply capabilities, and increasing product value.”
Mr. Thanh noted that the UK market effectively contains two parallel layers of demand. On one side, the country remains a highly industrialized economy with substantial demand for machinery, pharmaceuticals, equipment, technology, and industrial products. On the other, it is also a developed consumer market with stable demand for garments, footwear, furniture, seafood, coffee, agricultural products, processed food, and other daily consumer goods.
Vietnam’s export profile to the UK increasingly reflects this diversification. According to information shared at the seminar, Vietnam’s exports to the UK in 2025 included approximately $1.35 billion in phones and components, $1.3 billion in computers, electronics products and components, more than $1.05 billion in footwear, and nearly $895 million in garments.
The UK factsheet similarly shows that telecoms and sound equipment accounted for the largest share of UK imports from Vietnam, at £2.9 billion ($3.9 billion), or 34.9 per cent of total goods imports from Vietnam in 2025.
The shift suggests Vietnam’s exports to the UK are no longer concentrated solely in traditional labor-intensive sectors, but are increasingly tied to higher-value industrial production and global supply chains.
Despite favorable tariff preferences under the UKVFTA and the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), experts warned that market access alone does not ensure competitiveness.
Mr. Le Dinh Ba, Trade Counselor and Head of the Vietnam Trade Office in the UK, said the UK remains a highly-competitive market where Vietnamese products compete directly with exporters from China, India, and ASEAN countries. He highlighted rules of origin as one of the most important bottlenecks for exporters.
Mr. Ba also warned exporters not to focus only on freight-on-board (FOB) prices when planning market entry. Businesses should instead calculate the full cost of reaching consumers, including transportation, insurance, warehousing, certification, testing, packaging, returns, marketing, distributor discounts, and exchange-rate risks. For food, agricultural, and animal-origin products, companies must pay particular attention to sanitary and phytosanitary (SPS) requirements and the UK’s evolving border control regime.
He outlined several strategic recommendations for Vietnamese firms, including standardizing products and documentation before securing orders, moving beyond contract manufacturing toward stronger branding and product design, properly utilizing rules of origin under free trade agreements, managing compliance and logistics costs, selecting appropriate distribution channels, and investing in long-term market presence.
Broader cooperation
Officials said bilateral cooperation is also broadening beyond merchandise trade into areas with higher added value. According to Mr. Thanh, the UK maintains strengths in finance, energy, pharmaceuticals, aviation, advanced technology, education, professional services, and green growth, sectors where Vietnam’s demand is increasing as the country seeks to modernize its economy.
Frameworks such as the UKVFTA, the CPTPP, the Vietnam-UK Joint Economic and Trade Committee (JETCO), and the recently-upgraded Comprehensive Strategic Partnership are expected to create more opportunities for collaboration in services, investment, clean energy, green finance, innovation, and technology.
The Trade Promotion Agency has also announced plans to organize a trade delegation to the UK from July 5-14, covering Manchester, London, and Edinburgh, alongside major exhibitions, including the Manchester Furniture Show and Source Fashion.
Still, speakers agreed that the UK market is unlikely to reward short-term approaches based primarily on low prices. Rather, success will increasingly depend on whether Vietnamese businesses can adapt to stricter standards, ensure stable supply capabilities, strengthen trust with importers, and position products for long-term value creation in one of Europe’s most demanding markets.
Source: Linh Tong
