Even as the country seeks to negotiate lower levies, there’s growing evidence that Trump’s tariffs are not totally hobbling its economy
[HANOI] From being hit with punitive tariffs on Liberation Day to being selected by one of the world’s biggest tech companies to build its next generation of smart home devices, Vietnam is having a moment.
Its economy grew more than 8 per cent last quarter, exports are running hot and the country just clinched a long-awaited promotion to emerging-market status from FTSE Russell, a move that could bring billions of US dollars in new capital.
Now Apple is joining the rush, preparing to manufacture its first smart home hubs and even future household robots in the South-east Asian nation. It’s the clearest signal yet that a country once threatened by US President Donald Trump with a 46 per cent tariff has become indispensable to the global economy.
“In contrast to other countries that are stuck in political paralysis, Vietnam has moved very swiftly to secure lower tariffs and reform its economy to increase productivity and competitiveness,” Trinh Nguyen, a senior economist at Natixis, said. “This has allowed Vietnam to emerge as a winner under Trump 2.0 despite high tariffs because it’s favoured as a foreign direct investment destination for those wanting to diversify away from worsening US-China tensions.”
Details of Apple’s plans remain scant, although, according to sources familiar with the matter, it’s teaming up with Chinese electric vehicle juggernaut BYD for its home hub products and robot. It’s unclear what, if any, Chinese components will be used in the end goods. Under the deal with Vietnam announced by Trump, the country’s goods face a 20 per cent tariff. But products deemed to be transshipped, or sent to an intermediate destination before their final one, will be hit by a 40 per cent levy.
Regardless, Apple’s selection of Vietnam is a win for the country, which has already attracted manufacturers from Samsung Electronics to Nike thanks to its skilled, youthful population. Apple chief executive officer Tim Cook said in May that Vietnam will ultimately produce “almost all” of its iPads, MacBooks, watches and AirPods for the American market.
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And even as Vietnam seeks to negotiate lower levies, there’s growing evidence that Trump’s tariffs are not totally hobbling its economy. Vietnam expanded 8.23 per cent in the July to September quarter, the fastest pace in three years, as factories went into overdrive shipping goods to the US before higher tariffs took effect in early August.
Vietnam’s stock market has also been on a roll, climbing about 40 per cent this year and outperforming regional peers. The rally has been fuelled by retail investor optimism and by the long-anticipated market upgrade confirmed last week. IPO activity has also been lively, with proceeds from new listings in Vietnam exceeding those in London.
“Vietnam’s resilience to potential US tariff pressures is a reflection of its diversified export structure and its evolving role in global supply chains,” Michael Piro, the co-CEO of Indochina Capital, said. “While tariffs may target certain sectors or trading partners, Vietnam benefits from being part of a broader ecosystem, where many exports are components or intermediate goods integrated into multinational production networks rather than direct consumer goods.”
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Indeed, manufacturing output surged 9.92 per cent in the first nine months of 2025 from a year earlier, with around 77 per cent of companies surveyed by the National Statistics Office saying export orders were higher or at the same level, a sign that US buyers are shrugging off the tariff hit for now.
Piro noted that over the past few years, major supply chain players, including Foxconn and GoerTek, a Chinese firm that designs precision components and smart hardware for consumer electronics, have expanded their production capacity there, “reinforcing Vietnam’s position as a key node in the global technology and electronics ecosystem”.
Still, even with so much breaking its way, Vietnam’s trajectory will not be seamless.
The government’s target of 8.3 to 8.5 per cent growth this year will be “extremely challenging” in the current global climate, Nguyen Thi Huong, the head of the statistics office, has said. The World Bank has also warned that Vietnam’s expansion remains at risk from tariff-tied drops in exports to the US and potential declines in foreign direct investment.
Given its heft, North America will also remain critical, trade between Vietnam and the US more than tripled over the past decade to about US$150 billion in 2024. Shipments of laptops and electronic products surged some 131 per cent in September, Vietnam Customs data show, while total exports rose 38.5 per cent in September from a year earlier to US$13.7 billion.
That surge in trade underscores to what degree Vietnam now sits at the intersection of global forces. As some analysts note, this time it’s less about Vietnam than the external dynamics propelling it forward.
“This is a once in a generational moment for Vietnam,” said Nguyen Thomas, chief global markets officer at SSI Securities. US-China relations have put the spotlight on global supply chains and “Vietnam will be the leading voice for South-east Asia because of our economic growth and now because of our capital markets”. BLOOMBERG
