By Mai Hương

Despite growing uncertainties in global trade, Việt Nam remains committed to its ambitious economic growth targets.

The country has raised its 2025 GDP growth target to 8 per cent, with an even bolder vision of achieving double-digit expansion by 2030. While this ambition faces challenges, economic analysts remain confident in Việt Nam’s ability to sustain strong growth momentum.

A major headwind comes from new US tariff policies, which could impact Việt Nam’s trade-driven economy. Trade accounts for nearly 90 per cent of GDP, making the country highly vulnerable to external shocks. The US, Việt Nam’s largest export market, absorbs about 30 per cent of its total exports.

Recent moves by US President Donald Trump, including a national security investigation into imported wood and potential new tariffs on key goods such as aluminium, steel and automobiles, signal a more protectionist stance that could weigh on Việt Nam’s export sector.

“The biggest risk [to Việt Nam’s economic outlook] is US trade policy,” Louis Kuijs, chief economist, Asia-Pacific, S&P Global Ratings, told Việt Nam News.

“One risk is direct tariffs on Việt Nam, but another major concern is that if the US imposes tariffs on many countries, the global economy could slow down significantly. A slowdown in China or the US would weaken Việt Nam’s export,” Kuijs said.

Việt Nam’s strong GDP performance in 2024 was largely driven by trade, with two-way trade turnover reaching a record US$800 billion.

According to Kuijs, Việt Nam faces challenges mainly due to its trade surplus with the US.

A main worry is the broad authority granted to the US government in a recent White House memo. It allows new tariffs to be imposed based on factors including trade surplus, tariff rates, taxes, regulations, and even wages, giving Washington flexibility to justify tariff increase if needed.

Việt Nam’s trade surplus with the US hit a record $120 billion in 2024, the third-largest after China and Mexico. This rapid growth may be a key concern for the US government, according to a Goldman Sachs report citing US customs data.

A new report by Goldman Sachs warns that higher US tariffs on Vietnamese goods could significantly impact the country’s economy. The investment bank estimates that a 10 per cent tariff increase could reduce Việt Nam’s GDP by 1 per cent.

Adaptability

However, Việt Nam is well-positioned to adapt to these changes.

The country is emerging as an attractive investment destination as global firms reassess supply chains. Despite potential challenges from US tariffs, Việt Nam’s strong manufacturing base offers new opportunities as companies rethink production and sourcing strategies.

“We expect around 6.5 per cent GDP growth in the coming three years, implying that Việt Nam will vie with India for the title of fastest-growing Asian economy,” Kuijs said.

In the medium and long term, he noted that Việt Nam’s key challenge was moving up the value chain by producing higher-value goods and services. To sustain strong growth, the country needed to boost the role of local firms in global supply chains, improve the business environment, enhance competition in the service sector, and upgrade workforce skills.

The Asian Development Bank has revised its 2025 growth forecast upward to 6.6 per cent, citing robust export performance, strong foreign direct investment inflows, and stabilising global commodity prices.

Similarly, the World Bank predicts a 6.5 per cent GDP growth rate, making Việt Nam one of the fastest-growing economies in the East Asia-Pacific region. The International Monetary Fund projects Việt Nam’s economy to reach $506 billion in 2025, ranking 33rd globally.

Foreign direct investment continues to be a key driver of Việt Nam’s economic success.

In 2024, disbursed FDI capital hit a record $25.4 billion, up from $23.2 billion in 2023. This reflects strong investor confidence in Việt Nam’s stable macroeconomic environment, competitive labour force, and strategic position in global supply chains. As global manufacturers seek to diversify away from China, Việt Nam remains a prime destination for new investments.

According to Nguyễn Quang Thuân, CEO of FiinRatings, industries with resilient domestic supply chains such as metals, nickel, and seafood are expected to weather trade disruptions better than sectors heavily reliant on Chinese raw materials, such as textiles and garments. The latter could face increased scrutiny from the US, as Washington tightens measures against perceived circumvention of tariffs through third-country production hubs like Việt Nam.

Despite past trade policy challenges, FiinRatings notes that Việt Nam benefited under Trump’s first term, demonstrating adaptability in turning risks into opportunities.

Việt Nam’s government is also proactively seeking measures to mitigate trade risks.

At a briefing by the Trade Promotion Agency on March 4, Đỗ Ngọc Hưng, commercial counsellor and head of the Việt Nam Trade Office in the US, noted that Việt Nam had yet to be recognised as a full market economy, putting it at a disadvantage in anti-dumping investigations.

As a result, the Việt Nam Trade Office in the US was urging the swift development of a clear roadmap to protect the country’s trade interests from potential tariffs under Trump’s administration. At the same time, it calls for deeper strategic cooperation with the US to ensure long-term stability and growth in bilateral relations.

In January 2025, Việt Nam’s exports to the US reached $10 billion, up 4.6 per cent year-on-year, while imports from the US declined by 6.6 per cent.

The Office of the United States Trade Representative is currently reviewing and compiling a country-by-country assessment of trade policies it considers unfair or restrictive to US exports, with a focus on countries with the largest trade deficits. This review will help shape future US trade policies, with the deadline for feedback set for March 11, 2025.

Deputy Minister of Industry and Trade Phan Thị Thắng stressed the importance of closely monitoring geopolitical developments and enhancing trade competitiveness. Strengthening economic ties with the US remains a priority, alongside diversifying export markets to reduce dependency on any single trade partner.

Despite potential US tariff increase and global trade tensions, Việt Nam’s economy remains resilient. With steady FDI inflows, policy stability, and adaptability, the country is well-prepared for challenges. Diversifying trade partners, strengthening supply chains, and maintaining investor confidence will be key to sustaining growth and resilience. VNS