United States tariffs causing pressure on Vietnam's export durability
The US has announced tariff rates for various trading partners, including Vietnam, which could have significant implications for the Southeast Asian nation's economy. According to the National Statistics Office (NSO), a 20% countervailing tariff on Vietnamese exports to the US could reduce the country's total export value by approximately 9-10%, equating to an $11-12 billion drop in exports. This, in turn, would decrease Vietnam's GDP growth by approximately 0.8 percentage points.
The tariff is expected to increase the prices of Vietnamese goods in the US market by about 9.7%, leading to a decline in export value for key sectors such as textiles, garments, electronics, phones, and computers, which could see export drops around 4 percentage points. Other sectors like measuring and testing equipment and footwear are also anticipated to experience similar declines.
Despite the tariff, Vietnamese products are expected to remain competitive in the US market due to price increases in goods from other countries as well. Key export items to the US include computers, electronics, and components (19.4% of total export value), machinery, equipment, and parts (18.5%), textiles and garments (13.5%), phones and components (8.2%), wood and wood products (7.6%), and footwear (6.9%).
The NSO used the Input-Output (I/O) Table framework to evaluate the impacts of the tariff. The direct GDP impact is estimated at a 0.07 percentage point decline, with an additional 0.01 percentage point reduction from indirect spillover effects through inter-industry linkages.
The tariff will affect Vietnam's production, business activities, foreign and domestic investment, and economic growth in both the short and long term. To help foreign-invested companies and exporters navigate US tariff risks, KPMG has launched a tariff modelling platform.
Vietnam's total import value over the first seven months came to more than $252 billion, marking an 18% increase. The country's export value reached an estimated $261.8 billion in the same period, showing a 14.6% jump year-on-year.
Trade negotiations with the United States in early July appeared promising, leading to a revised forecast for Vietnam's GDP growth in 2025 by 0.9% to 6.9%. Despite the tariffs, the US remains Vietnam's largest export market, with a steadily increasing export share.
India and Bangladesh, key competitors for Vietnamese goods in the US market, face tariffs of 25% and 20% respectively. However, Vietnam's 20% countervailing tariff is relatively higher compared to some competitors like Indonesia, Cambodia, Malaysia, the Philippines, Thailand, and Pakistan, but not significantly so.
Reference: The 0.8 percentage point GDP growth reduction estimate and export value impacts come explicitly from the National Statistics Office's analysis using the Input-Output Table methodology, reported in August 2025[1].
[1] National Statistics Office report, August 2025.
- The tariff rates announced by the US for trading partners, such as Vietnam, pose complex challenges for the business sector, as it could lead to a significant drop in Vietnam's general-news export value, specifically for key sectors like textiles, garments, electronics, phones, and computers.
- The potential impact of these tariffs extends beyond just the economy, reaching into the realms of politics and finance, as a drop in Vietnam's GDP growth by approximately 0.8 percentage points may influence the nation's ability to invest, both domestically and internationally.
