Trump’s plan to impose a 60% tariff on Chinese imports could make Southeast Asia, including Vietnam, more attractive for businesses. However, if his protectionist policies target Vietnamese exports, this opportunity could become a vulnerability.
In 2022 and 2023, the US was Vietnam’s top export partner, followed by China, South Korea, Japan, and others. In the first 10 months of 2024, the US remained Vietnam’s largest export market with a turnover of $98.4 billion, while China was the largest import market with $117.7 billion.
Several potential impacts on Vietnam’s exports could arise based on his previous administration’s policies and trade strategies. Structural steel is one of the products that might be affected.
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China-U.S. Tensions – Supply Chain Diversification
Opportunities for Vietnam’s exports: During Trump’s previous administration, U.S.-China tensions led many companies to diversify supply chains, benefiting Vietnam. Its strategic location and strong foreign investment flows make it an attractive alternative for low-cost goods.
Risks for Vietnam’s exports: Increased routing of Chinese goods through Vietnam to avoid tariffs, sometimes under false labels, poses a risk. If the U.S. takes a tougher stance on countries dependent on China’s supply chain, Vietnam’s exports could be indirectly affected. Stricter U.S. investigations into the origin of Vietnamese goods could ensure Chinese businesses are not circumventing tariffs via Vietnam.
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Shift in Global Trade Agreements
Over the past decade, Vietnam has become a manufacturing powerhouse, attracting billions in FDI and becoming ASEAN’s export leader. Nearly 40% of ASEAN exports to North America come from Vietnam’s exports.
TPP Withdrawal: Trump’s decision to withdraw the U.S. from the Trans-Pacific Partnership (TPP) limited Vietnam’s access to favorable trade terms with the U.S.
Future Actions: If Trump favors bilateral agreements over multilateral ones, Vietnam may need to negotiate directly with the U.S. for trade benefits.
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Specific Sectors at Risk or Benefit
Benefiting Sectors: Apparel, footwear, electronics and steel fabrication might still gain if U.S. companies seek to relocate production from China to Vietnam.
At-Risk Sectors: Agriculture, seafood, and furniture exports could face stricter import conditions or tariffs due to competitive concerns.
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High-Value Imports
The U.S. may prioritize high-value imports from Vietnam, such as liquefied natural gas, aircraft engines or structural steel to offset the trade imbalance. This focus could reduce the likelihood of severe tariffs targeting Vietnam’s exports.
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Economic Growth Projections
The World Bank projects Vietnam’s GDP growth to reach 6.1% in 2024 and 6.5% in 2025. UOB Bank has revised its 2024 growth forecast upward to 6.4%, higher than its previous projection of 5.9%. Vietnam’s Exports of goods and services (% of GDP) were reported at around 93 in 2022 and 2023.
A calculated opportunity with caution
The return of Trump to the White House may initially look promising for Vietnam, potentially boosting Vietnam’s exports through renewed investment and business migration from China. However, Vietnam must strategically manage its economic ties with the U.S. to avoid becoming a target of populist policies that could negatively impact its export sectors. By continuing to position itself as a cooperative and beneficial partner, Vietnam can protect and expand its exports, capitalizing on the shifting landscape of global trade under the Trump administration.
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Newinds Corp provides fabricated metal solutions, including structural steel, steel parts, steel sheds, buildings, metal sheets, stainless steel fabrication, and value-added services, all from Vietnam.
At Newinds, we pride ourselves on being more than just a manufacturer; we are your dedicated partner in delivering comprehensive, custom-fabricated steel solutions. Our commitment to excellence is evident in every project we undertake, from the initial design phase to the final product delivery.
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