Trade wars have become an important way to change global business. The U.S.-China tariff disputes are now affecting Vietnam, with a 46% tariff on Vietnamese exports. This move, meant to fix trade imbalances, is a big challenge for Vietnam’s economy, which relies on exports. However, this tariff shock also offers a chance for Vietnam to rethink its strategy.
The 46% tariff targets sectors that make up more than 80% of Vietnam’s exports to the U.S., including electronics, textiles, footwear, furniture, and agriculture. Vietnam’s $70.5 billion in electronics exports face higher costs, which could hurt investment and jobs. The $46.2 billion textiles and footwear sectors could see factory closures and job losses, especially for low-income workers and women. As the top exporter of wood furniture, the $28.3 billion furniture industry may face disruptions. Agricultural exports, like coffee and cashews worth $8.5 billion, could become less competitive in the U.S.
Instead of retaliating, Vietnam has taken a calm approach, focusing on legal methods and working with other countries. Decree 73/2025/NĐ-CP was introduced to improve trade by lowering import taxes on U.S. goods, showing Vietnam’s commitment to fair trade. The country is also using trade agreements like CPTPP, EVFTA, and RCEP, focusing on cooperation instead of conflict.
Vietnam now has two paths to choose from: defending its market share in the competitive U.S. market (Red Ocean) or creating new, high-value industries (Blue Ocean). In the Red Ocean, Vietnam is negotiating for tariff relief, offering tax cuts to exporters, and trying to protect its current markets. In the Blue Ocean, it’s working to upgrade its manufacturing, focusing on high-value sectors like semiconductors, renewable energy, and digital technology.
The 2025 U.S. tariff shock is more than just a trade issue—it’s a key moment for Vietnam’s economy. While the country has grown by relying on exports, this challenge provides an opportunity to diversify and become less dependent on global market changes. By using both defensive and innovative strategies, Vietnam can handle the situation and come out stronger, becoming a leader in the global economy.
3 comments:
It's really interesting how these tariff wars are challenging countries, in this case Vietnam, forcing them to advance their economy and consider the plans for the long run implication of tariffs.
I think this is a very similar story happened to Japan in 90s but slightly different. It is interesting to see how Vietnam handles this situation and what will be the outcome
It is interesting geopolitically to think about tarrifs as both a right wing and left wing idea. Of course, right now, it is a Right wing administration who is pursuing them relentlessly, against their traditionally free trade leanings. However some old school leftists would see a withdrawl of the U.S. from certain countries economically as a way to liberate them from the U.S. economy's sphere of influence, which they may see as imperial.
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