Strategic Measures for Vietnam Amid Global Trade Tensions

With the prospect of a worldwide trade war approaching, experts believe Vietnam must proactively devise specific strategies to shield its manufacturing, commerce, and export sectors from potential market fluctuations.

In 2024, Vietnam’s foreign trade is projected to reach around 800 billion USD, with exports totaling roughly 405 billion USD. The US market alone is expected to account for nearly 119 billion USD of this, representing a notable 23.3% rise from 2023.

Nonetheless, new tax regulations enacted by the US following President Trump’s re-election are beginning to influence global markets, including Vietnam. In the event of a trade conflict, Vietnamese exports to the US could encounter serious obstacles. Variability in prices and increasing costs are anticipated to diminish export quantities and exert pressure on businesses.

Given the risk of a trade war, it’s vital for Vietnam to track market fluctuations both domestically and internationally, allowing for proactive assessments and responses to evolving situations.

Early in February, global trade tensions intensified as the US introduced a 25% extra tariff on imports from Mexico and Canada and a 10% additional tariff on Chinese products effective February 4. Nevertheless, shortly afterward, President Trump announced a temporary halt to tariffs on Mexico and Canada, though the 10% tariff on Chinese goods remains, prompting retaliatory measures from China, including a 15% tariff on coal and liquefied natural gas from the US, as well as a 10% tariff on crude oil and agricultural machinery.

During a government meeting on February 5, Prime Minister Pham Minh Chinh highlighted the complex and shifting dynamics in both global politics and economics, particularly the influence of major trading partners like the US and China on Vietnam’s exports and commerce. He urged his cabinet to analyze and anticipate emerging challenges, including the threat of a global trade war, that could disrupt supply chains and limit Vietnam’s market access. Local authorities and ministries were tasked with suggesting solutions and strategies to help Vietnam navigate these hurdles while exploring growth opportunities.

Tran Thanh Hai, from the Ministry of Industry and Trade (MoIT), confirmed that the sector is targeting a 12% growth in exports for the current year compared to 2024. However, the global landscape in 2025 may remain uncertain with unpredictable developments looming.

Despite these challenges, the MoIT is prepared for various scenarios to sustain and enhance export activities. They intend to devise contingency plans to mitigate the effects of new US tariffs.

The ministry also plans to utilize current free trade agreements (FTAs) while seeking new ones to diversify Vietnam’s export markets and products. Furthermore, they will boost exports to nearby and emerging markets, enhance brand promotion, and strengthen trade initiatives as part of their comprehensive strategy to navigate global uncertainties.

Vietnamese exporters have been urged by MoIT to stay updated on market trends, take initiative in their responses, and maintain transparency regarding product origins. They should effectively utilize FTAs and explore niche markets to capitalize on emerging opportunities in the volatile global trade environment.

Meanwhile, Deputy Minister Tran Quoc Phuong of Planning and Investment acknowledged that international developments could pose significant challenges to export activities, particularly due to protectionist measures and tariffs from the US.

He reiterated the Prime Minister’s call to maximize the benefits of existing FTAs and expedite discussions for new agreements, emphasizing the importance of expanding markets and stabilizing sales for sustained growth.

Minister of Industry and Trade Nguyen Hong Dien underscored the need to continue leveraging existing markets while exploring new ones, enabling businesses to diversify their clientele, products, and supply chains, ultimately fostering export growth.

Nguyen Quoc Viet from the Vietnam Institute for Economic and Policy Research (VEPR) cautioned that a global trade war could disrupt supply chains and dampen global production and consumption, directly impacting Vietnam’s export growth and economic progress.

He stressed the necessity for Vietnam to prepare for potential global economic changes. On the diplomatic front, the country has successfully established itself as a reliable and open partner, which is crucial for enhancing international relations through its engagement in multilateral agreements and organizations.

The expert emphasized collaborating more closely with key business partners, improving the domestic business landscape, and diversifying growth drivers as essential strategies moving forward.