Vietnam’s economic rise has been one of the biggest success stories of the past decade. Its position as a key manufacturing hub and a favored alternative to China in global supply chains has brought remarkable growth and foreign investment.
But with Washington increasingly scrutinizing trade imbalances and President Donald Trump back in the White House, Hanoi now faces a defining moment.
Vietnam’s trade surplus with the US soared last year, making it one of the largest in Asia. That exposure makes it an easy target for tariffs and other trade measures should the Trump administration shift decidedly to a more protectionist stance.
While Trump has yet to signal direct action against Vietnam, history suggests that could change quickly. His past rhetoric has been unambiguous—Vietnam was labeled “almost the single worst abuser” of trade practices in 2019.
Should tariffs return, they won’t just hit exports; they’ll dent investor confidence, disrupt supply chains and complicate Hanoi’s ambitions of deeper global economic integration. The government must be proactive in avoiding a repeat of the past trade tensions that saw it scrambling for solutions. Hanoi has options—but the time to act is now.
Strategic response
Vietnam can’t afford to rely so heavily on the US market. The first move should be diversifying export markets to reduce vulnerability to American tariffs.
Expanding trade partnerships with the European Union, the Middle East and ASEAN neighbors would provide alternative destinations for Vietnamese goods.
That said, the US remains a critical trade partner and Hanoi must also shore up its standing with Washington. One way to achieve this is by increasing American imports.
Recent deals to buy US aircraft and liquified natural gas (LNG) were a step in the right direction, but Vietnam needs to go further. Expanding these commitments and prioritizing imports from politically sensitive US industries, such as agriculture, energy and high-tech manufacturing, would make it harder for Washington to justify punitive trade measures.
A formal framework to rebalance trade would also be beneficial. Negotiating a structured, multi-year plan with the US that gradually narrows the trade gap through increased investment and purchases of American goods could pre-empt aggressive action from Washington.
Vietnam’s success has been fueled by foreign direct investment, particularly from China. But that dependence could become a liability if Washington views Vietnam as merely an extension of Chinese manufacturing rather than a genuine trading partner.
The Biden administration was already watching Chinese investments in Vietnam closely, and a Trump White House will be even more hawkish.
Hanoi must encourage investment from firms that bring more than just low-cost assembly. High-value sectors such as semiconductor manufacturing, AI-driven automation and advanced logistics should be prioritized.
More joint ventures with US firms would also help shift the narrative—turning the country from a perceived trade surplus offender into a critical node in America’s supply chain resilience strategy.
Vietnam’s labor force is another asset that should be leveraged. With the right policies, the country can position itself as a destination for high-tech investment rather than just a low-cost alternative to China.
Strengthening education, vocational training and research collaborations with American institutions would reinforce the nation’s credibility as a long-term economic partner rather than a competitor taking advantage of tariff loopholes.
Deeper diplomatic engagement
Hanoi’s diplomatic finesse has helped it navigate past trade disputes, but the stakes are higher this time. The government should ramp up engagement with US policymakers, industry leaders and trade associations.
Establishing a stronger presence in Washington, not just through official diplomatic channels but also via direct industry lobbying, will be key.
Vietnam’s rapid economic rise has been a success story in many respects, but it also means the country lacks the deep-rooted corporate and political relationships in the US that, say, Japan or South Korea enjoy.
A more vocal business and political delegation in Washington would allow Vietnam to better shape the conversation around its trade policies. It should emphasize not only the benefits the country brings to the US economy—such as job creation through Vietnamese purchases of US goods—but also its role in global supply chain resilience, which remains a priority for American businesses.
While engagement, diversification and investment strategies can help Vietnam avoid the worst-case scenario, it must also be prepared for it. A contingency plan should include strategies for managing potential tariffs, currency fluctuations (the dong recently hit an all-time low against the greenback), and supply chain disruptions.
The Vietnamese central bank must ensure stability in financial markets should trade measures affect investor confidence. Businesses should be incentivized to expand domestic supply chains where possible to reduce exposure to external shocks.
Hanoi has the tools to strengthen its standing with the US while securing its broader economic interests. The question is whether it will use them before Trump decides to force its hand.