Vietnam urged to develop strategic responses to US reciprocal tariffs

Vietnam must take proactive steps to minimize the adverse effects of US reciprocal tariffs on its export enterprises while safeguarding domestic market stability and supply chains, according to economic experts.

These recommendations were highlighted during the Policy Dialogue on “US Reciprocal Tariffs: Impacts and Strategic Adjustments for Vietnam”, held on May 8 in Hanoi.

Speaking at the dialogue, Prof. Dr. Nguyen Thanh Hieu, Vice Rector of the National Economics University (NEU), stressed that the new US tariff policy significantly affects not only major economies like China,  the European Union (EU), among  others, but also countries deeply integrated into global supply chains—Vietnam included.

Vietnam’s exports to the US primarily consist of processed and manufactured goods across key sectors, including electronics, components, telecommunications, textiles, footwear, and wood products. The majority of these exports originate from the foreign direct investment (FDI) sector in Vietnam, a crucial driver of Vietnam’s economic growth.

"The new US tax policy poses a direct challenge to our strategic export sectors, impacting not just trade volumes but also future FDI inflows into Vietnam," Mr. Hieu warned.

Experts at the dialogue underscored the urgency of crafting timely and effective response strategies to mitigate potential disruptions.

Assoc. Prof. Dr. Phan Huu Nghi, Deputy Director of NEU’s Institute of Banking and Finance, advised that Vietnam should focus on minimizing the negative impacts of reciprocal tariffs while simultaneously ensuring domestic market stability, supply chain resilience, and investor confidence. Turning these challenges into a catalyst for reform could ultimately strengthen the country’s global competitiveness.

Further diversification of export markets is also crucial. Dr. Nghị suggested leveraging free trade agreements such as EVFTA, CPTPP, and UKVFTA to expand Vietnam’s presence in regions including the EU, India, the Middle East, and Africa, reducing reliance on any single market.

Beyond merely responding to challenges, Vietnam has an opportunity to redefine its long-term development strategy. Experts anticipate that traditional industries and services may become obsolete due to advancements in digital transformation, robotics, and artificial intelligence (AI).

To remain competitive, Vietnam should ramp up investment in high-tech sectors such as semiconductors, AI, software development, and new materials, while creating conditions for deeper engagement from US businesses in the domestic economy.

Assoc. Prof. Dr. Ta Van Loi, Dean of NEU’s School of Business, emphasized the need to accelerate the expansion of Vietnam’s private economic sector, which plays a pivotal role in job creation, budget contributions, and innovation.

To achieve this, the Vietnamese government must continue pushing forward with institutional reforms, simplifying administrative procedures, and ensuring a fair, transparent, and highly competitive business environment—allowing the private sector to emerge as a true powerhouse of economic growth.