Do Khoa Tan, deputy secretary general of the Vietnam Electronics Industries Association, emphasised the critical importance of understanding all tariff policies in the context of global supply chain shifts in Ho Chi Minh City last week.

“As Vietnam increasingly positions itself as a strategic manufacturing hub, thoroughly understanding and adapting to new policies is a matter of survival for businesses,” Tan stated at a seminar on US tariffs and supply chain shifts on May 29.

“In the face of tariff turbulence, enterprises must prioritise core strategies. They need to effectively leverage free trade to boost exports to the EU, Japan, and ASEAN; apply advanced technologies and renewable energy to meet international standards; boost supply chain transparency by ensuring clear product origin; and mitigate legal risks in an increasingly regulated global trade environment,” Tan added.

Meanwhile, Do Thi Thuy Huong, vice president of the Vietnam Association of Supporting Industries, suggested that Vietnamese businesses need to move from subcontracting to developing their own original brands to increase intrinsic value.

“Companies that have heavily invested in technology, science, and human resource development have proven their resilience and confidence during uncertain periods and have continued to maintain and expand their production orders,” Huong noted. “Many businesses across Vietnam have proactively invested in automation, AI, and robotics to improve production capacity and stay ahead in the evolving global supply chain.”

In light of the US plan to raise import tariffs on certain goods after July 8, both Tan and Huong recommend that businesses must accelerate the export of signed orders and prioritise early delivery during the current period of tariff exemption or reduction and optimise logistics costs through collaboration with major shipping lines to reduce operational risks.

To avoid overreliance on a single market, Vietnamese enterprises must fully leverage the existing free trade deals. For example, textile and footwear sectors can benefit from zero per cent tariffs when exporting to the EU or Japan while electronics and component industries should focus on South Korea, ASEAN, and emerging markets such as India, the Middle East, and Africa, where demand is growing and competition remains relatively low.

Additionally, businesses are encouraged to strengthen partnerships with US importers and associations such as the American Chamber of Commerce, shift towards sustainable manufacturing, and scale up the production of high-tech goods such as semiconductors and AI components.

Enterprises should also focus on restructuring operations to enhance value and competitiveness, accelerating digital transformation, expanding into e-commerce, ensuring compliance with international standards, and developing response strategies for various potential tariff scenarios.

Vietnam currently holds the fifth-largest trade surplus with the US, at more than $104 billion in 2024.

Nevertheless, the shift in supply chains away from China presents a valuable opportunity for Vietnam to expand its export industries and attract investment. At the same time, this transition places significant pressure on the country’s infrastructure, workforce development, and supply chain management capabilities, the experts agreed.

Source: Vietnam Investment Review