One of the biggest success stories of the past ten years has been Vietnam’s financial fall. Its location as a major manufacturing hub and preferred alternative to China in global supply chains has seen notable growth and international investment.
Hanoi now has a distinctive time as President Donald Trump is resuming his presidency and Washington is extremely watching trade imbalances.
Vietnam’s trade deficit with the US soared past season, making it one of the largest in Asia. If the Trump administration decides to take a decidedly more interventionist approach, it becomes a prime target for tariffs and other industry measures.
Trump has yet to declare strong action against Vietnam, but history suggests that may change quickly. His earlier rhetoric has been unambiguous—Vietnam was labeled “almost the second worst abuser” of business practices in 2019.
If tariffs returning, they didn’t just reach exports, they’ll thorn investor confidence, undermine supply chains and complicated Hanoi’s ambitions of deeper global economic integration. The government may take proactive steps to prevent a repeat of the previous business unrest that left it looking for solutions. Hanoi has options—but the time to action is now.
Strategic comment
Vietnam can’t manage to rely so heavily on the US market. Diversifying trade markets should be the first step in order to lessen sensitivity to American tariffs.
Expanding trade agreements with neighbors in the Middle East, ASEAN, and the European Union would offer new markets for Asian goods.
Despite this, Hanoi has also strengthen its relationship with Washington because the US is still a crucial business partner. One way to increase National goods is one way to accomplish this.
Although recent agreements to purchase US aircraft and liquid natural gas ( LNG ) were good, Vietnam needs to make more progress. Expanding these commitments and emphasizing imports from politically sensitive US industries, such as agriculture, power and high-tech production, may make it harder for Washington to support punishing business measures.
It would also be useful to have a conventional system in place to adjust trade. Negotiating a well-defined, multi-year program with the US to gradually close the deal gap could stop Washington from launching violent action.
Vietnam’s victory has been fueled by foreign direct investment, especially from China. If Washington opinions Vietnam as merely an extension of Taiwanese production rather than a real trading partner, that dependency may turn into a liability.
A Trump White House would be even more aggressive if the Biden administration had now closely watched Chinese assets in Vietnam.
Hanoi has encourage investment from businesses that offer more than just low-cost manufacturing. High-value areas such as semiconductor production, AI-driven technology and advanced transportation should be prioritized.
Further joint ventures with US companies may also aid in changing the narrative, turning the nation from a viewed as a trade surplus criminal to a crucial component of America’s supply chain resilience strategy.
Vietnam’s work force is another advantage that should be leveraged. The nation is place itself as a place for high-tech investment rather than merely as a low-cost substitute for China with the right policies.
Strengthening collaborations in research, technical training, and knowledge with American institutions may strengthen the country’s reputation as a long-term economic partner rather than a potential rival by taking advantage of tariff loopholes.
Deeper political commitment
Hanoi’s political skill has helped it understand past business issues, but the stakes are higher this day. The authorities should ramp up relationship with US politicians, business leaders and industry associations.
It will be important to strengthen our standing in Washington, not just through formal diplomatic channels but also through strong industry lobbying.
Vietnam’s rapid economic growth has been a success story in many ways, but it also means the nation lacks the deep-rooted corporate and political bonds that, say, Japan or South Korea enjoy in the US.
A more active business and political group to Washington may help Vietnam shape the conversation around its business plans. It should be emphasized both the advantages the nation has for the US market, such as the creation of new jobs through Taiwanese goods, and its contribution to the world’s supply chain resilience, which is still a top priority for American businesses.
While relationship, growth and funding strategies can help Vietnam prevent the worst-case situation, it must also be prepared for it. Strategies for preventing possible tariffs, currency fluctuations, and supply chain disruptions should be included in a contingency plan.
If trade policies have an impact on investor confidence, the Asian central bank may ensure stability in the financial markets. Businesses may be encouraged to increase domestic source chains where possible to reduce physical shock coverage.
Hanoi has the resources to improve its relationship with the US while safeguarding its wider financial interests. The key is whether it will apply them before Trump decides to impose his will.