Vietnam's US Export Dependency: A Tariff Time Bomb?

Vietnam's heavy reliance on US exports has become a double-edged sword, with the country's economic resilience now hanging in the balance as US trade policies shift. In 2024, Vietnam's exports to the US accounted for a staggering 29% of its total exports, making it the largest export market for Vietnam (Reuters, 2025). While this dependency has driven Vietnam's economic growth, it has also exposed the country to significant risks, particularly in the face of potential tariffs or trade disruptions.

The US administration's recent trade policies, such as the proposed reciprocal tariffs, could have severe long-term implications for Vietnam's export-driven economy. In 2025, the US administration announced additional 25% tariffs on all steel and aluminum imports, which could directly affect Vietnam's exports to the US. Vietnam is the eighth-largest steel exporter to the US, with exports surging over 140% from 2023 (CNBC, 2025). If these tariffs are implemented, Vietnam's steel exports to the US could face a substantial increase in costs, potentially leading to reduced export volumes and lower revenues.

Moreover, Vietnam's large trade surplus with the US makes it a target for reciprocal tariffs, as the US administration has mandated to prepare by April (Reuters, 2025). This could further exacerbate the impact of tariffs on Vietnam's exports and economic growth. In 2024, Vietnam's trade surplus with the US was the fourth-largest among US trading partners, lower only than China, the 27-country EU, and Mexico (US trade data, 2024).

To mitigate these risks, Vietnam should focus on diversifying its export markets and reducing its dependence on the US market. By leveraging the 17 free trade agreements (FTAs) that Vietnam has signed with partners, businesses can explore new markets and reduce the impact of potential tariffs or trade disruptions on the Vietnamese economy.



Vietnamese businesses can employ several strategies to diversify their export markets and reduce dependence on the US market. These strategies include:

1. Utilizing Free Trade Agreements (FTAs): Vietnam has signed 17 FTAs with over 60 global markets, providing significant opportunities for businesses to tap into both key and traditional markets, develop niche markets, and explore emerging markets. By leveraging these FTAs, Vietnamese businesses can expand their reach and reduce reliance on the US market (MoIT, 2025).
2. Developing Roadmaps and Strategies: Businesses should proactively develop roadmaps and strategies to diversify export markets, improve product quality, and ensure compliance with technical, labour, and environmental standards. This will help them better navigate the global trade environment and adapt to changing market conditions (MoIT, 2025).
3. Expanding into Traditional Markets: While Vietnam has made significant progress in its traditional markets, there is still room for growth. Businesses should focus on expanding their presence in these markets to reduce dependence on the US market. For example, exports to the EU, ASEAN, the Republic of Korea, and Japan accounted for a significant portion of Vietnam's total export turnover in 2024 (MoIT, 2025).
4. Exploring Emerging Markets: Vietnamese businesses should consider exploring emerging markets to further diversify their export markets. These markets may offer new opportunities for growth and help reduce dependence on established markets like the US. For instance, businesses could target markets in Africa, Latin America, or other Southeast Asian countries (MoIT, 2025).
5. Controlling the Origin of Raw Materials: To avoid falling foul of trade defence measures, businesses should ensure they control the origin of raw materials used in their products. This will help them maintain compliance with international trade regulations and avoid potential legal issues (Dr. Le Duy Khoi, 2025).
6. Approaching Investment Cooperation Cautiously: When dealing with companies from countries currently engaged in trade disputes with the US, businesses should approach investment cooperation with caution. This will help them avoid potential risks associated with these disputes (MoIT, 2025).
7. Strengthening Competitiveness: To better compete in global markets, Vietnamese businesses should focus on improving their competitiveness by investing in technology, innovation, and workforce development. This will help them maintain a strong position in both traditional and emerging markets (Standard Chartered, 2025).

In conclusion, Vietnam's heavy reliance on US exports poses a significant risk to its economic resilience in the face of potential tariffs or trade disruptions. To mitigate these risks, Vietnam should focus on diversifying its export markets and reducing its dependence on the US market. By leveraging its FTAs, expanding into traditional and emerging markets, and strengthening its competitiveness, Vietnam can better navigate the global trade environment and ensure sustainable economic growth.