Thu Apr 17 00:09:58 UTC 2025: ## Vietnam Walks Tightrope Amidst Trump’s Shifting Tariffs and China’s Advances
**Ho Chi Minh City, Vietnam** – Vietnam’s export-driven economy is teetering on the edge of a precipice as US President Donald Trump’s unpredictable trade policies create immense uncertainty. While a 90-day pause on a proposed 46 percent tariff on Vietnamese goods has offered temporary respite, businesses remain on high alert, unsure of what the future holds.
The US is Vietnam’s largest export market, accounting for 30 percent of its GDP. The threat of crippling tariffs has left businesses like SVC Group, a cashew exporter, in limbo, with shipments delayed and customers confused about applicable taxes. “No one knows what’s happening,” says CEO Kieu Quoc Thanh.
The uncertainty extends beyond individual businesses. Experts like Tyler Manh Dung Nguyen, chief market strategist at Ho Chi Minh City Securities Corporation, describe the situation as a “reality show,” with daily shifts in the trade landscape. This volatility contrasts sharply with the decades-long effort to improve US-Vietnam relations, a process now strained by Trump’s actions.
While Vietnam negotiates a trade deal with the US, China’s recent high-profile visit by President Xi Jinping has added another layer of complexity. Xi’s visit, marked by warm receptions and the signing of 45 agreements, was interpreted by Trump as a coordinated effort to undermine the US. China’s open market offer to Vietnam further highlights the country’s precarious position between the two superpowers.
Vietnam’s efforts to appease the Trump administration include pledges to increase purchases of US goods, ranging from Boeing planes to Starlink satellite internet services. Even deals with the Trump Organization have been struck. However, experts acknowledge that balancing the US trade deficit—$123.5 billion in 2024—is an insurmountable challenge given the economic disparity between the two nations.
Despite the uncertainty, some see opportunities. The current 10 percent tariff incentivizes increased exports in the short term. Furthermore, the ongoing US-China trade war could lead businesses to relocate from China to Vietnam, boosting the latter’s manufacturing sector. Vietnam is also working to address concerns about goods from China being relabeled as Vietnamese products to circumvent tariffs.
Ultimately, Vietnam finds itself in a delicate diplomatic dance, striving to maintain trade relations with both the US and China while navigating the unpredictable currents of the global trade war. The outcome remains uncertain, but Vietnam’s response will be crucial in shaping its economic future.
First Piper 