‘Cruel’ Trump tariffs bring Vietnam’s economic dreams crashing down
Facing a 46 per cent tax on export, Hanoi is one of the most striking victims of Trump’s take-no-prisoners trade war
And now this:
Bloomberg
Published: 9:36am, 4 Apr 2025
Hoang Cuong started buying shares five years ago in the hope that he could one day afford to buy a flat in Hanoi.
Fuelled by an economic boom that has transformed Vietnam into one of Southeast Asia’s growth stars, the value of the swimming instructor’s portfolio grew until his dream was within sight.
But on Thursday morning, he woke up to the news that US President Donald Trump had slammed Vietnam with some of the most punitive tariffs in his “Liberation Day” package.
“I am in shock,” said Cuong with deep sighs, speaking from his downtown district workplace. With returns on his investments all but wiped out, the 36-year-old is planning to cash out whatever little he can get. “I am not sure what will be next, whether the situation will get worse – the market might drop even more.”
The Communist country of 101 million people has thrived in the 40 years since the Doi Moi reforms, as it turned itself into a maker of everything from Gap clothes to Samsung smartphones. Now it is facing a 46 per cent tax on exports and is one of the most striking victims of Trump’s second take-no-prisoners trade war.
“In Vietnamese we call it a ‘cutthroat rate’ which will basically destroy our businesses,” said Le Dang Doanh, an economist and former government adviser in Hanoi. “We can’t rely on the US market any more,” Doanh added.
Vietnamese politicians and businessmen had hoped that the warm relationship between the two governments would insulate the country from any severe tariff measures. The US tariffs do not reflect the current relations the two countries share, Vietnam’s Prime Minister Pham Minh Chinh said on Thursday.
World leaders react to Trump’s new tariff blitz as global trade war escalates
“This is cruel,” said Tran Anh Minh, a shop manager at a downtown mall in Ho Chi Minh City. “A lot of factories will close, a lot of people will lose their jobs,” he said.
The blow to Vietnam’s export sector will ripple through its economy, which is one of the world’s most trade-dependent nations. Exports are equivalent to nearly 90 per cent of economic output, ensuring that the new tariffs will slow the pace of growth in what is currently Southeast Asia’s fastest-expanding economy.
Ironically, Vietnam was one of the biggest beneficiaries of Trump’s first trade war back in 2018, which was primarily directed at China. The stand-off between the world’s two biggest economies then had pushed companies from Nike Inc. to Nintendo Co. to relocate some production to Vietnam to avoid levies, sending manufacturing activity into overdrive.
Vietnam’s economy grew at an average 7 per cent pace in 2018 and 2019 before slowing down during the pandemic years. It rebounded last year to notch a 7.1 per cent expansion. Vietnam added close to a million jobs due in part to the US-China trade war, with the labour force numbers returning to more than 56 million in 2023 after a brief dip during the pandemic.
It now has a crucial position in the supply chains of major US brands. Today, about half of all Nike shoes and 39 per cent of Adidas shoes are made in Vietnam and it has emerged as a hub for global electronics manufacturers.
For many workers in Bac Ninh province, home to suppliers for brands including Apple Inc., the reality of the tariffs threat has not yet sunk in. However, one official in the province said he was terrified.
“I am in shock,” said Cuong with deep sighs, speaking from his downtown district workplace. With returns on his investments all but wiped out, the 36-year-old is planning to cash out whatever little he can get. “I am not sure what will be next, whether the situation will get worse – the market might drop even more.”
The Communist country of 101 million people has thrived in the 40 years since the Doi Moi reforms, as it turned itself into a maker of everything from Gap clothes to Samsung smartphones. Now it is facing a 46 per cent tax on exports and is one of the most striking victims of Trump’s second take-no-prisoners trade war.
“In Vietnamese we call it a ‘cutthroat rate’ which will basically destroy our businesses,” said Le Dang Doanh, an economist and former government adviser in Hanoi. “We can’t rely on the US market any more,” Doanh added.
Vietnamese politicians and businessmen had hoped that the warm relationship between the two governments would insulate the country from any severe tariff measures. The US tariffs do not reflect the current relations the two countries share, Vietnam’s Prime Minister Pham Minh Chinh said on Thursday.
World leaders react to Trump’s new tariff blitz as global trade war escalates
“This is cruel,” said Tran Anh Minh, a shop manager at a downtown mall in Ho Chi Minh City. “A lot of factories will close, a lot of people will lose their jobs,” he said.
The blow to Vietnam’s export sector will ripple through its economy, which is one of the world’s most trade-dependent nations. Exports are equivalent to nearly 90 per cent of economic output, ensuring that the new tariffs will slow the pace of growth in what is currently Southeast Asia’s fastest-expanding economy.
Ironically, Vietnam was one of the biggest beneficiaries of Trump’s first trade war back in 2018, which was primarily directed at China. The stand-off between the world’s two biggest economies then had pushed companies from Nike Inc. to Nintendo Co. to relocate some production to Vietnam to avoid levies, sending manufacturing activity into overdrive.
Vietnam’s economy grew at an average 7 per cent pace in 2018 and 2019 before slowing down during the pandemic years. It rebounded last year to notch a 7.1 per cent expansion. Vietnam added close to a million jobs due in part to the US-China trade war, with the labour force numbers returning to more than 56 million in 2023 after a brief dip during the pandemic.
It now has a crucial position in the supply chains of major US brands. Today, about half of all Nike shoes and 39 per cent of Adidas shoes are made in Vietnam and it has emerged as a hub for global electronics manufacturers.
For many workers in Bac Ninh province, home to suppliers for brands including Apple Inc., the reality of the tariffs threat has not yet sunk in. However, one official in the province said he was terrified.
A Nike store in Hanoi, Vietnam. Photo: EPA-EFE
It is unclear how exactly supply chains will reshape themselves in the coming months and years, given other manufacturing destinations in Southeast Asia and South Asia have also been hit with tariffs, and returning to China is hardly an option for businesses as levies there have been increased to 54 per cent.
Vietnam is still fighting for a reprieve, with the deputy prime minister set to travel to the US in the coming days to meet officials as well as attend a policy dialogue.
But unlike bigger economies like China or the European Union, Vietnam has little leverage – its population which earns an average monthly income of 8.5 million dong (US$330) hardly buys any American-made goods and its trade surplus with the US stands at US$123.5 billion, the third largest after China and Mexico, according to data from the US Census Bureau.
As the country processes its new status as a trade pariah, only one thing seems certain.
“This is a big loss for everyone,” said Duong Thi Ngoc Dung, the vice-chairwoman of Vietnam’s Textile & Apparel Association and a factory owner herself. “The tariff will make everything more expensive in the US as well.”
It is unclear how exactly supply chains will reshape themselves in the coming months and years, given other manufacturing destinations in Southeast Asia and South Asia have also been hit with tariffs, and returning to China is hardly an option for businesses as levies there have been increased to 54 per cent.
Vietnam is still fighting for a reprieve, with the deputy prime minister set to travel to the US in the coming days to meet officials as well as attend a policy dialogue.
But unlike bigger economies like China or the European Union, Vietnam has little leverage – its population which earns an average monthly income of 8.5 million dong (US$330) hardly buys any American-made goods and its trade surplus with the US stands at US$123.5 billion, the third largest after China and Mexico, according to data from the US Census Bureau.
As the country processes its new status as a trade pariah, only one thing seems certain.
“This is a big loss for everyone,” said Duong Thi Ngoc Dung, the vice-chairwoman of Vietnam’s Textile & Apparel Association and a factory owner herself. “The tariff will make everything more expensive in the US as well.”
The Trump Gold Card will be introduced soon….$5 million each. If they sell 1 million equals $5 trillion, four times the annual trade deficit. I suspect quite a few Vietnamese will buy.
ReplyDeleteVietnam will surrender. Will cut their tariff to zero and open up its market to 500yo Bully, who has $125 billion trade deficit ammunition. No way Uncle Ho can win. Revenge for March 29, 1973.
ReplyDeleteBully, who has $125 billion trade deficit ammunition?
DeleteHow to payback?
Oooop… playing caoka as usual!
Kampuchea will surrender too, kwai2 cut their tariffs with 500yo Bullyland. But what they really need to cut is 5000yo Bullyland Ream PLAN Naval Base that will be used to take control over the Dashed Line Sea.
ReplyDeleteWith the implicit protection of China, what to surrender?
DeleteUnlike mfering u, forever kowtowing to ur western idols!
The Communist Party of China caused the deaths of over 40 Million Chinese in the 1950s and 1960s.
ReplyDeleteYet all countries consider this ancient history of no relevance to their relations with today's CCP.
SO why keep beating your chest about what Donald Fuck considers irrelevant ancient Vietnam history from the 1950s and 1960s?
chinese kill chinese, wank kill wank, viet kill viet - no one cares. but wank kill viet - different story
DeleteRegurgitating ur grandmother's lie AGAIN!
DeleteU know why nobody cares about that lie?
Bcoz it's a lie, so so simple!