How does Vietnam navigate global trade headwinds?

At a recent panel discussion entitled “Trade Under Pressure: Macroeconomic Outlook and Vietnam’s Role in the Global Supply Chain”, co-organized by Techcombank and the Central and Eastern European Chamber of Commerce (CEEC), experts from government agencies, international chambers of commerce, and private enterprises analyzed how Vietnam is adapting to shifts in global trade dynamics and capitalizing on FDI opportunities through agile government policies and a resilient economic structure.

Future prospects

Mr. Nguyen Hoang Tung, Economist at Techcombank, provided a comprehensive assessment of Vietnam’s macro-economic landscape, highlighting both the opportunities and the challenges as the country navigates a complex global environment.

Vietnam remains one of the most open economies in the world, he explained, with a trade-to-GDP ratio among the highest in the region. This openness has underpinned the country’s robust growth over the past decade, but it also exposes its economy to significant external shocks.

The US and China are currently Vietnam’s two largest trading partners, accounting for 43 per cent of the country’s total trade turnover. “The lack of a universal definition of transshipment has created compliance difficulties for Vietnamese exporters, especially in electronics, textiles, and furniture,” Mr. Tung told the gathering.

Despite global tensions, recent economic indicators point to Vietnam’s resilience. Forecasts from the International Monetary Fund (IMF) and other institutions suggest an improving global outlook. Recession fears have eased, and Techcombank anticipates a moderate slowdown rather than a contraction.

From the perspective of a long-established European enterprise in Vietnam, Mr. Thorne Laudy, Managing Director of logistics provider a. hartrodt Vietnam, highlighted the unprecedented nature of today’s global trade instability. He criticized the growing use of broad tariffs under emergency legal mechanisms, warning that existing trade structures could be overridden without clear legal recourse.

For Vietnam, the US remains a key export market for electronics, textiles, footwear, and wooden furniture; sectors currently subject to tariff rates of 10-25 per cent under existing customs and trade frameworks. These rates could be entirely overridden by a new “wave” of sweeping tariffs, though no clear legal framework has yet been established.

Notably, about 20 per cent of Vietnam’s textile output is destined for the US. A mere 10 per cent fall in export value could therefore result in the loss of 60,000-70,000 jobs, with ripple effects impacting hundreds of thousands of dependents.

According to Mr. Laudy, Vietnam’s long-term prospects remain solid, with growing investor interest and diversification away from traditional manufacturing hubs.

Despite facing headwinds from potential tariff hikes, Mr. Tung believes Vietnam is not in a significantly adverse position. Current average tariff rates on Vietnamese goods exported to the US range from 3.2 per cent to 19.8 per cent, or much lower than the 46 per cent proposed earlier this year.

While some US policymakers suggest that up to one-third of Vietnam’s exports to the US originate from China, independent studies by Harvard Business School and UC San Diego estimate the actual figure at just 7-16 per cent. The lack of clarity around transshipment thresholds, however, continues to create compliance challenges for Vietnamese manufacturers.

Mr. Tung highlighted four key domestic drivers supporting Vietnam’s 2025 growth trajectory: exports, FDI, domestic demand, and public investment.

High-value FDI strategy

Vietnam is moving towards a more strategic and selective FDI model. Ms. Tran Thi Hai Yen, Director of the Southern Investment Promotion, Information and Support Center (SIPISC) at the Ministry of Planning and Investment, noted that the government is now prioritizing high-quality investments aligned with sustainability and technological advancement.

Priority sectors have been identified: electricity and energy infrastructure; semiconductors and AI; clean and renewable energy; innovation and R&D centers; the digital economy; high-quality agriculture; and international financial centers (IFCs).

To support investment in these sectors, Vietnam is implementing seven strategic policy solutions.

First, strategic orientation for FDI quality. The Strategy on foreign investment cooperation in the 2021-2030 period, contained in Decision No. 667/QD-TTg, dated June 2, 2022, aims to boost both the quantity and quality of FDI. This is reflected in Vietnam’s recent diplomatic moves.

Second, institutional reform. Politburo Resolution No. 50-NQ/TW, dated August 20, 2019, reaffirms the country’s commitment to modernizing its legal framework, aligning with international standards, and ensuring a transparent, stable environment for foreign investors.

Third, special incentives. Decision No. 29/2021/QD-TTg, dated October 6, 2021, provides preferential tax regimes and land access for projects in high technology and innovation. Complementing this, Decree No. 182/2024/ND-CP, dated December 31, 2024, establishes a national Investment Support Fund to provide direct financial support to large-scale, strategic investments.

Fourth, talent and workforce development. Vietnam is actively aligning its sectoral focus with talent development. To meet the demands of key industries, such as semiconductors, AI, and clean energy, the government is rolling out programs to train 50,000 engineers by 2030.

Fifth, the development of IFCs. Vietnam is formalizing plans for international financial centers in Ho Chi Minh City and central Da Nang city. Decision No. 1646/QD-TTg, dated August 1, 2025, establishes the Steering Committee for IFC Development, which will oversee implementation, policy coordination, and investor engagement.

Sixth, infrastructure upgrades. The National Power Development Plan VIII (PDP8) and other major projects are accelerating the development of highways, ports, and airports.

Seventh, cross-sector coordination. Greater collaboration between ministries and agencies is expected to strengthen Vietnam’s global competitiveness.

According to Mr. Vlad Savin, Partner at Acclime Vietnam and Vice Chairman of the CEEC, Vietnam is steadily enhancing its global investment appeal through two landmark initiatives: the development of IFCs and the introduction of long-term visa exemption policies.

The establishment of IFCs guided by international standards set by IOSCO and the OECD is modeled on Singapore’s framework, with a strong emphasis on environmental, social, and governance (ESG) finance, fintech innovation, and deeper ASEAN integration. Complementing this is Decree No. 221/2025/ND-CP, August 8, 2025, which grants five-year visa exemptions to senior executives, foreign investors, and international scholars, effectively reducing administrative barriers and facilitating long-term market access. “These efforts reflect Vietnam’s strategic vision to position itself as a regional hub for innovation, financial services, and high-value investment,” Mr. Savin said.

Solid growth outlook

Based on current trends, Techcombank forecasts Vietnam’s GDP growth for 2025 to fall between 6.5 and 7.7 per cent; slightly higher than projections from international organizations. Inflation remains under control, while credit growth is expected to reach 16 per cent, supported by robust loan demand.

Regarding the exchange rate, Mr. Tung expects a modest VND depreciation in the order of 2.5-3.5 per cent for the year, largely in line with movements of the USD. Measures by the State Bank of Vietnam (SBV), such as maintaining positive interest rate differentials and adjusting central rates, have helped stabilize forex reserves.

Interest rates are expected to rise slightly in response to stronger credit demand, but the overall monetary environment remains accommodative, with current rates still lower than during the Covid-19 period.

Mr. Tung concluded that Vietnam’s economic fundamentals remain solid, backed by strong internal growth drivers and prudent macro-economic management. However, external risks, particularly those linked to global trade and geopolitics, will require close monitoring as the country continues its transition toward a digital, green, and resilient economy.