Vietnam, a key beneficiary of global trade, is facing a significant challenge to its economic growth due to the imposition of new tariffs by US President Donald Trump. The country’s large trade surplus with the US and its role in facilitating Chinese companies’ supply chains make it particularly vulnerable to the effects of the tariffs.
The new levies, which include a 46% import duty on Vietnamese goods, have already dealt a heavy blow to the nation’s economy, which relies heavily on exports. The tariffs could shave off 1.2 percentage points from Vietnam’s economic growth this year, according to estimates by OCBC Bank, prompting economists to lower their GDP forecast for the country to 5% in 2025.
Vietnam has emerged as a manufacturing hub for many companies that sell goods in the US, including Nike, Adidas, and Apple Inc. However, the new tariffs may reduce the allure of setting up a manufacturing base in the country, weighing on foreign direct investment flowing into Vietnam.
Economists say that Vietnam’s negotiation with the Trump administration is unlikely to yield drastic results, as China’s retaliation has complicated the talks. The US is also concerned about “nontariff cheating,” including intellectual property theft and value-added tax on goods, which they see as hidden trade barriers.
Despite these challenges, Vietnam’s party chief To Lam has offered to remove all levies on US imports if the Trump administration does the same for Vietnamese exports to the US. However, White House trade advisor Peter Navarro has dismissed this offer, saying that it is not enough to warrant a cancellation of the new levies.
Source: https://www.cnbc.com/2025/04/08/vietnam-emerged-as-a-trade-winner-trump-new-tariffs-may-disrupt-that.html