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<\/p>\nThe article by Mr. \u0110inh H\u1ed3ng K\u1ef3, published in Forbes Vietnam on August 5, 2025.<\/p>\n
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The U.S. imposition of a 20% tariff from August\u202f1,\u202f2025, acts as a catalyst compelling Vietnam to reshape its growth model \u2014 transitioning from being a subcontractor to mastering the value chain, harnessing technology, and becoming the architect of its own path<\/p>\n
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From Trade Triumph to Tariff Shock<\/strong><\/p>\n <\/p>\n \nIn 2024, Vietnam exported $120 billion worth of goods to the U.S<\/strong>., while importing only $13.1 billion, resulting in a surplus of $106.9 billion \u2014 the third-largest globally after China and Mexico.<\/p>\n <\/p>\n \nHowever, in Washington\u2019s view, such a trade imbalance is dangerously lopsided. As a response, the re-elected Trump administration imposed reciprocal tariffs on nearly 100 trading partners, including a 20% tariff on Vietnam starting August 7, 2025.<\/p>\n <\/p>\n \nMoreover, goods merely transshipped through Vietnam\u2014with low domestic value-added and primarily produced elsewhere\u2014could face tariffs up to 40%.<\/p>\n <\/p>\n \nThough this rate is lower than the initially announced 46%, thanks to high-level negotiations, it still triggered widespread concern among businesses.<\/p>\n <\/p>\n \nThis policy affects not only vulnerable sectors like textiles, wood, and seafood, but also export-heavy industries such as electronics, equipment, and plastics. They now face pressure to revise business strategies, reposition markets, and restructure supply chains.<\/p>\n <\/p>\n Crucially, observers note that the U.S. applies the principle: \u201cdeficit-based tariffs.\u201d With nearly 90% trade deficit, Vietnam is seen as implicitly taxing U.S. goods equivalently.<\/p>\n <\/p>\n \nWhether debatable or not, this approach signals the closing chapter of unconditional trade privileges \u2014 and if Vietnam doesn\u2019t adapt swiftly, this tariff shock may be the first of many .<\/p>\n <\/p>\n \nFDI: A Two-Sided Sun<\/strong><\/p>\n <\/p>\n \nThe tariff shock serves as a wake-up call, highlighting the downside of a growth model overly reliant on export-driven, foreign-input-heavy strategies and exposing weaknesses in Vietnam\u2019s value chain.<\/p>\n <\/p>\n \nA FiinGroup report notes that by end 2024, only 21.6% of Vietnam\u2019s export value to the U.S. came from domestic firms; the remaining 78.4% was from FDI, chiefly from China, South Korea, and Taiwan. Domestic firms are nearly absent in sectors like electronics, footwear, and plastics.<\/p>\n <\/p>\n \nThree Strategic Vulnerabilities<\/strong><\/p>\n <\/p>\n \n\u2022 Thin Industrial Base: Domestic value addition remains minimal. In electronics \u2014 Vietnam\u2019s largest export sector \u2014 90% of component value is imported, mostly from China. This undermines compliance with strict rules of origin under FTA or markets like the U.S. and EU. <\/p>\n \nOpportunity Amid the Storm<\/strong><\/p>\n <\/p>\n \nDespite the tariff turmoil, positive signs emerge. In the first half of 2025, Vietnam attracted over $21.5 billion in newly registered FDI\u2014the highest in 15 years. Capital flows are shifting into higher-value sectors like electronics, semiconductors, water treatment, and logistics .<\/p>\n <\/p>\n \nCities like Hanoi, Bac Ninh, and Hai Phong report surges in FDI, driven by R&D, green manufacturing, and high-tech projects.<\/p>\n <\/p>\n \nAdditionally, major Vietnamese groups such as Vingroup, Viettel, and FPT aim to break into global value chains with \u201cmake in Vietnam\u201d products. <\/p>\n <\/p>\n \nReposition the FDI Strategy<\/em><\/strong><\/p>\n <\/p>\n \nTransition from indiscriminate FDI attraction to selecting high-quality projects. Incentivize FDI with high-tech content, technology transfer, talent training, domestic integration, and linkages with Vietnamese firms. Project review should assess technology, environmental, and local integration impacts.<\/p>\n <\/p>\n \nEmpower Vietnamese Enterprises<\/em><\/strong><\/p>\n <\/p>\n \nAccelerate FTAs with the U.S. to lock in tariff rates and reduce uncertainty. Push for recognition as a market economy and removal of high-tech export restrictions. Comply with commitments on origin fraud prevention and customs transparency.<\/p>\n <\/p>\n \nAvoid dependence on one basket. Expand exports beyond the U.S. to the EU, East Asia, and the Middle East via new FTAs. Develop domestic supporting industry and seek alternative suppliers beyond China to enhance supply chain resilience.<\/p>\n <\/p>\n \nStrengthen Legislation and Institutions<\/strong><\/em><\/p>\n <\/p>\n \nFinalize bilateral trade negotiations with the U.S. to stabilize tariffs; push for market economy status and removal of restrictions; and ensure transparency and integrity in trade operations .<\/p>\n <\/p>\n <\/p>\n <\/p>\n \nVietnam once prospered by embracing FDI and leveraging U.S.\u2013China trade tensions. But past success can become today’s vulnerability without timely restructuring. In an increasingly uncertain world, no nation can sustainably develop by remaining a subcontractor. Vietnam must evolve into a game designer, mastering technology, brand, and value chains. Ultimately, this 20% tariff shock might just be the impetus for a more self-reliant, resilient growth model.<\/p>\n <\/p>\n \nDinh Hong Ky<\/strong> <\/p>\n
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\nThis dominance underscores a dual reality: while FDI has been pivotal for industrialization, job creation, export income, and GDP growth, it also reveals fragility: low value-addition, reliance on imported inputs, and profit repatriation. Many FDI firms treat Vietnam as an assembly hub -importing components, labeling goods \u201cMade in Vietnam,\u201d and exporting them. When the U.S. probes origin and launches tariffs on \u201cdisguised goods,\u201d Vietnam-though unintentionally-suffers.<\/p>\n
\n\u2022 Domestic Firms’ Weak Position: Limited competitiveness and integration into global value chains persist. FDI firms offer little tech transfer, and policies favor FDI over domestic firms in land, capital, and infrastructure access.
\n\u2022 Growth Model Anchored on Two Pillars: Export and FDI are the twin engines. With the U.S. tightening export channels, both wobble. FDI inflows can shift to more stable markets, and supply chains may diversify. A PwC survey shows 44% of firms are diversifying production, and 34% are renegotiating contracts to source alternatives.<\/p>\n
\nThese developments suggest that Vietnam can recalibrate its growth model\u2014if it harnesses external pressures to drive internal reform.<\/p>\n![\"\"](\"https:\/\/dinhhongky.com\/wp-content\/uploads\/2025\/08\/Von-FDI-vao-Viet-Nam-theo-chau-luc@2x-1536x1259-1-1200x984-1.png\")
\nFour Policy Recommendations<\/strong><\/p>\n
\nDiversify Markets and Supply Chains<\/em><\/strong><\/p>\n![\"\"](\"https:\/\/dinhhongky.com\/wp-content\/uploads\/2025\/08\/TCSG-1200x674-1.jpg\")
\nConclusion: Redesign the Game<\/strong><\/p>\n
\nChairman of Secoin Corporation
\nChairman of the Ho Chi Minh City Construction & Building Materials Association (SACA)
\nChairman of the Ho Chi Minh City Green Business Association (HGBA)
\nVice Chairman of the Ho Chi Minh City Business Association (HUBA).<\/p>\n