Economic Headwinds for Vietnam as US Tariffs Take Effect
Vietnam’s economy is poised to face significant challenges following the implementation of a new 20% countervailing tariff on its goods by the United States. According to comprehensive calculations from the National Statistics Office (NSO), this tariff is projected to result in a substantial decrease in Vietnam’s export value to the US market, with an anticipated drop of approximately $11-12 billion. This figure, which represents a 9-10% decline in the country’s total export value, is a considerable blow to its trade-dependent economy. Furthermore, the report indicates that this trade pressure will have a ripple effect on Vietnam’s overall economic performance, likely reducing its gross domestic product (GDP) growth by 0.8 percentage points. The NSO’s analysis, which utilizes a detailed Input-Output (I/O) Table to assess the impacts on both the supply and demand sides of the economy, has further broken down this figure, with 0.07 percentage points attributed to the direct impact of the tariff and 0.01 percentage points to indirect consequences.
Targeted Impact on Key Export Sectors
The new tariff regime is expected to have a particularly pronounced effect on several of Vietnam’s key export industries. The report from the National Statistics Office provides a granular view of the projected declines across different sectors. Products that are integral to the country’s export revenue, such as textiles, garments, electronics, phones, and computers, are forecasted to see their export values fall by as much as 4 percentage points. Other significant categories, including machinery, footwear, and wood products, are also expected to experience varying degrees of decline. However, despite these pressures, the NSO has provided a crucial point of perspective: Vietnam’s exports are anticipated to maintain a degree of competitiveness in the US market, as the new 20% countervailing tariff is considered to be on par with or, in some cases, even lower than the tariffs currently imposed on several of Vietnam’s major regional rivals, such as India and Bangladesh, who also compete for a share of the American market.
Resilience and Optimism Amidst Economic Projections
Despite the sobering forecast for GDP growth, the National Statistics Office maintains a sense of optimism regarding the country’s overall economic outlook. Their confidence is supported by a number of recent positive economic indicators. During the first seven months of 2025, for instance, Vietnam’s export value surged by an impressive 14.6% year-on-year, with the United States solidifying its position as the country’s single largest export market. This robust export performance is further complemented by an 18% increase in the import of raw materials for export orders, a clear sign of strong production and business resilience across the nation. If this momentum can be sustained throughout the remainder of the year, the NSO believes that Vietnam’s GDP is highly likely to exceed the 8% growth mark for the entire year. This projection demonstrates that the country’s strong and dynamic economic foundation has the potential to absorb and ultimately offset the negative financial impacts of the new tariffs.
