Vietnam’s economy has long been one of Asia’s brightest stars, powered by a robust, export-driven growth model. From electronics to textiles and furniture, the country has positioned itself as a manufacturing hub for the world. But no market is more crucial to Vietnam’s export success than the United States. In 2023 alone, Vietnam exported over $118 billion worth of goods to the U.S., making it its largest trading partner by a wide margin. China, in second place, received $85.7 billion, with other countries trailing far behind.
This reliance on the U.S. has turned Vietnam into a key supplier for American consumers, particularly in electronics, garments, and home furnishings. Many global brands — from Apple to Samsung to Nike — have manufacturing operations based in Vietnam, relying on its skilled labor and competitive costs to serve the American market.
But now, that model is under threat.
Trump’s Return and the Trade Shock
Former President Donald J. Trump, known for his aggressive stance on trade, has reemerged on the political stage with a policy that could reshape global supply chains — including Vietnam’s. In a move that stunned Hanoi, Trump announced sweeping “reciprocal” tariffs on several U.S. trading partners, with Vietnam among those hit the hardest.
According to the announcement, Vietnam now faces a 46% reciprocal tariff on most of its exports to the U.S. That’s second only to Cambodia’s 49% and significantly higher than China’s 34% or the European Union’s 20%. Even countries like Thailand and Bangladesh — close competitors in manufacturing — are facing lighter penalties (36% and 37% respectively).
This decision was justified by Trump’s team with the claim that Vietnam imposes barriers on U.S. goods that amount to roughly 90%, although Vietnamese officials have pushed back hard. They point out that the country’s average MFN (Most Favoured Nation) import tariff is just 9.4% — far from what the U.S. alleges. Hanoi has called the tariffs “unfair” and “lacking scientific basis.”
Key Industries Take the Hit
What makes this tariff especially damaging is what it targets: Vietnam’s most important exports. The 46% duty applies to electronics and textiles, the pillars of Vietnam’s export economy. These sectors previously enjoyed low or duty-free access to the U.S. market. That advantage is now gone.
To understand the scale of the blow, let’s look at Vietnam’s exports by category. In 2023, electrical machinery and electronics alone contributed $42.7 billion — a 36.3% share of all exports to the U.S. This includes smartphones, computer parts, TV components, and items used in American data centers. U.S.-based tech companies, such as Apple and Dell, depend on Vietnamese factories to supply these products. Samsung, which has major operations in Vietnam, also exports heavily to the U.S.
With a 46% tariff slapped on these goods, their cost to U.S. buyers rises dramatically. A Vietnamese-made laptop or phone could now be 50% more expensive compared to alternatives from countries with lower tariffs like Malaysia or Mexico. This makes Vietnam’s goods far less competitive, and American companies may begin moving their supply chains elsewhere — leading to a loss of business and foreign investment in Vietnam.
Trade Balance and Economic Risk
The trade issue has far broader implications. Vietnam has consistently enjoyed a positive trade balance with the U.S., meaning it exports far more to America than it imports. In 2024, the U.S. trade deficit with Vietnam reached $123 billion, a number likely to catch the attention of any protectionist-minded leader.
While this surplus has helped fuel Vietnam’s economic boom, it now becomes a vulnerability. If the U.S. tariffs stay in place, American buyers may shift their orders to cheaper markets, potentially shrinking Vietnam’s exports and reversing its trade surplus.
And it’s not just about trade volumes. Vietnam’s net trade in goods and services has been a major driver of growth. In 2023, the country recorded a $35 billion surplus, helping support infrastructure, healthcare, and education. Any significant drop in exports could impact GDP growth and reduce government revenue.
Even more concerning is Vietnam’s limited foreign reserves, which stood at $92.24 billion in 2023. While that might seem substantial, it’s relatively modest for an export-heavy nation. A prolonged decline in exports — especially to the U.S. — would strain Vietnam’s ability to defend its currency or cushion economic shocks.
Growth in Jeopardy
Vietnam’s economy had been soaring. The government reported 7.1% GDP growth in 2024 and set a target of 8% for 2025. But these goals are now at risk. Global financial institutions are already downgrading projections. The World Bank estimates 2025 growth at 6.8%, citing U.S. tariffs as a major downside risk.
The impact will be felt most sharply by the millions of workers in Vietnam’s textile and electronics sectors. A drop in U.S. orders could mean layoffs, factory closures, and wage cuts — all of which would undermine efforts to reduce poverty and expand Vietnam’s middle class.
How Vietnam Is Responding
Despite labeling the tariffs as unfair, Vietnam is not standing still. Hanoi has initiated diplomatic talks with Washington and is requesting a temporary suspension of the tariffs. On April 3, 2025, Prime Minister Pham Minh Chinh held an emergency cabinet meeting, signaling high-level engagement to resolve the crisis.
Vietnam has also made goodwill gestures to ease tensions. On March 26, 2025 — just days before the tariff deadline — the Ministry of Finance reduced MFN import duties on various U.S. goods. Tariffs on American wood products were cut from 20% to 0%, while others saw 2–25 percentage point reductions. Additionally, Vietnamese state-owned companies have pledged to buy $54 billion worth of U.S. goods over the next few years, including aircraft and agricultural commodities.
What’s Next?
Whether these efforts will be enough to reverse the U.S. tariffs remains to be seen. But one thing is clear: Vietnam’s reliance on exports, particularly to the United States, has become a double-edged sword. A policy shift in Washington can send tremors through the Vietnamese economy almost instantly.
Still, Vietnam is no stranger to adversity. Its leadership has shown agility in navigating global headwinds before — from COVID-19 disruptions to the U.S.-China trade war. This latest challenge may push Vietnam to diversify its trade partners, increase domestic consumption, and accelerate its efforts to climb the value chain.
For now, the country watches and waits — with its economic future hanging in the balance.