Vietnam’s Trade Gambit: Navigating Trump Tariffs with Strategic Deals

Vietnam’s economy, fueled by its role as a global manufacturing hub, faces a pivotal test as it seeks to diversify trade partnerships to counter the looming threat of U.S. tariffs. With a record $123.5 billion trade surplus with the U.S. in 2024 and proposed 46% tariffs on its exports, Hanoi is accelerating efforts to secure new free trade agreements, boost imports from the U.S., and modernize its industries—all while balancing geopolitical tensions with China.

The Tariff Threat and Vietnam’s Export Engine

Vietnam’s exports to the U.S. reached $31.39 billion in Q1 2025, led by electronics ($7.47 billion), machinery ($5.26 billion), and textiles ($3.78 billion). These sectors are now under existential pressure as U.S. tariffs threaten to erase profit margins. A reveals that even a 10% tariff—let alone the full 46%—could slash export growth by 1.5–2%, shaving 0.2–0.3% off its GDP in 2025.

To mitigate this, Vietnam is pursuing a two-pronged strategy: increasing U.S. imports and tightening trade rules. In early 2025, it finalized $4.15 billion in deals for LNG, biofuels, and AI chips, aiming to reduce its surplus. It has also cracked down on “Vietnam washing”—the re-export of Chinese goods—by enforcing stricter rules of origin and origin documentation.

Diplomacy as an Economic Lever

Hanoi’s diplomatic playbook combines high-stakes commercial deals with regulatory overhauls. Notably:
- Vietjet secured a $50 billion agreement with Boeing and GE Aviation to modernize its fleet, signaling a long-term bet on U.S. aerospace.
- The Trump Organization’s $1.5 billion golf-course-hotel project in Hung Yen Province underscores Vietnam’s use of private-sector partnerships to curry favor with the U.S. administration.
- Vietnam’s telecom sector opened to foreign ownership, allowing Elon Musk’s Starlink to operate without local joint ventures—a $1.5 billion investment that strengthens ties with U.S. tech firms.

These moves aim to leverage U.S. corporate interests while appeasing the Trump administration.

Geopolitical Tightrope: China vs. the U.S.

Vietnam’s balancing act between the U.S. and China remains fraught. While U.S. tariffs loom, Chinese President Xi Jinping’s April 2025 visit to Hanoi—a stop on his Southeast Asia tour—highlighted Beijing’s push to deepen economic ties. The two countries inked 45 agreements, though details remain opaque. Analysts note that Vietnam’s $323 billion trade with China (vs. $136.6 billion with the U.S.) makes severing ties impossible.

Yet, Vietnam’s neutrality is tested daily. The U.S. has demanded Vietnam curb Chinese transshipment, while China accuses Vietnam of “leaning toward the U.S.” To navigate this, Hanoi is emphasizing its “non-aligned” stance, as Deputy Prime Minister Ho Duc Phoc stated: “We do not side with one country to fight another.”

Foreign Investment: A Double-Edged Sword

U.S. direct investment in Vietnam totaled $12 billion by April 2024, with sectors like accommodation ($4.1 billion from Winvest’s resort projects) and manufacturing ($2.4 billion from Apple, Intel, and Nike) leading the way. A shows growth, but it lags behind Asian peers like Singapore and Japan. Vietnam’s goal is to attract more high-tech investments, such as semiconductor fabrication or green energy, to reduce reliance on low-margin assembly lines.

However, risks persist. Vietnam’s exports contain 19% Chinese content, making them vulnerable to U.S. anti-dumping duties. A reveals that 40% of its solar panel exports face tariffs due to Chinese ownership of Vietnamese factories.

The Path Forward: Growth Amid Uncertainty

Vietnam’s 2025 growth target of 8% hinges on its ability to:
1. Diversify trade partners: Boost exports to the EU (its second-largest market) and ASEAN, leveraging the EU-Vietnam Free Trade Agreement (EVFTA).
2. Upgrade industries: Invest in high-tech sectors like AI and solar energy to increase local content and reduce Chinese dependency.
3. Resolve trade classifications: The U.S. must decide by July 2025 whether to remove Vietnam’s “nonmarket economy” status, which currently enables punitive tariffs.

Conclusion: A Gamble with High Stakes

Vietnam’s strategy is a high-risk, high-reward play. Its proactive measures—increasing U.S. imports, tightening trade rules, and courting U.S. investors—could avert disaster. But the $123.5 billion trade imbalance and reliance on Chinese supply chains remain vulnerabilities.

For investors, Vietnam offers opportunities in sectors like renewable energy, infrastructure (e.g., railways and ports), and tech-enabled manufacturing. The government’s 8% GDP growth target for 2025 is ambitious but achievable if it secures tariff relief and deepens ties with global partners. As EuroCham Vietnam’s Bruno Jaspaert notes, “Vietnam’s agility in pivoting trade routes has turned crises into growth catalysts before—it could do so again.”

Yet, the shadow of tariffs and geopolitical rivalry lingers. Vietnam’s fate in 2025 will hinge on whether its strategic deals can outpace the storm clouds.