#TrumpTariffs The U.S. imposing tariffs of up to 46% on imported goods from Vietnam, as announced on April 2, 2025, will have significant impacts on the Vietnamese economy, especially given that the U.S. is Vietnam's largest export market, accounting for about 30% of total export turnover. Below are the main impacts:
1. Impact on exports and economic growth
- Decrease in export turnover: Major industries such as textiles, leather and footwear, wooden products, electronics, and machinery – which account for a large portion of exports to the U.S. – will face significant pressure. The 46% tariff raises product costs, reducing competitiveness compared to goods from other countries that are not subject to high tariffs, leading to the risk of reduced orders.
- Impact on GDP: Exports contribute about 85% of Vietnam's GDP (in 2024). A decline in exports to the U.S. could lead to slower GDP growth, especially if the shift to other markets is not timely.
2. Impact on businesses and employment
- Export businesses suffer losses: Companies that heavily rely on the U.S. market, such as May Sông Hồng (80% of revenue from the U.S.), TNG (46%), or Savimex (50%), may face higher costs, reduced profits, and even have to cut production. This leads to poorer operating cash flow.
- Job losses: Export sectors employ about 30% of Vietnam's workforce. If orders decrease, millions of workers in fields such as textiles and leather may be affected, from reduced working hours to job losses.
3. Pressure on inflation and exchange rates
- Rising prices of goods: To offset tax costs, businesses may increase selling prices or switch to sourcing materials from more expensive sources, driving domestic prices up, causing inflationary pressure.
- Pressure on the VND: Decreased exports may reduce foreign currency supply (especially USD), causing fluctuations in the VND/USD exchange rate, forcing the State Bank to intervene to stabilize it.
4. Impact on supply chains and investment
- Supply chain disruptions: Multinational enterprises in Vietnam (such as in the electronics sector) may shift part of their production to other countries to avoid tariffs, diminishing Vietnam's advantages in the global supply chain.
- Impact on FDI: Although Vietnam remains attractive due to cheap labor and strategic location, high tariffs may cause investors to reconsider, especially if they are targeting exports to the U.S.
5. Long-term opportunities and challenges
- Market redirection: Vietnam could boost exports to the EU, ASEAN, or China to compensate, as it did in 2023 when exports to the U.S. fell by 11% but total export turnover only decreased by 4.6%. However, this requires time and a long-term strategy.
- Economic restructuring: This is an opportunity for Vietnam to reduce dependence on the U.S., strengthen domestic production, and increase the added value of goods.
Conclusion
The 46% tariff will pose serious short-term challenges for exports, businesses, and Vietnamese workers, while also putting pressure on inflation and exchange rates.