Workers at a fruit packaging company in Dong Nai. Enterprises have recognised the challenge and taken adaptive measures to maintain their presence in the US market.
Vietnamese exporters are working to fulfil existing orders and make the most of the remaining time before new US tariffs take effect, while preparing strategies to adapt to upcoming changes, according to industry insiders and analysts.
Nguyen Ngoc Hoa, chairman of the Ho Chi Minh City Union of Business Associations, said that since the US announced reciprocal tariffs on Vietnamese goods, companies have acknowledged the challenge and begun implementing adaptive measures to maintain their foothold in the US market.
While the tariff move presents significant obstacles, it may also offer new opportunities. Nguyen Ngoc Luan, CEO of Meet More, said exports to the US currently make up about 30 percent of his company’s total. The initial announcement in early April sparked concern across the industry.
“After the initial panic, things have settled. Exports are still proceeding during the 90-day grace period, but we’re preparing for a potential drop of 30 to 40 percent in the near term,” said Luan. In response, he is exploring other markets, particularly Australia and South Korea. Over the past month, Luan travelled to Australia to expand the company’s distribution network and customer base.
Pham Van Viet, vice chairman of the Ho Chi Minh City Association of Garments, Textiles, Embroidery and Knitting, said textile and garment manufacturers are accelerating production in the second quarter to ship as many orders as possible before the July 9 deadline. The industry grew by just 9.6 percent last year, but with signs of recovery, it is targeting 16 percent growth in 2024. First-quarter growth reached 11.6 percent — a promising sign.
According to Viet, if the proposed US tariffs are enacted, Vietnam’s textile industry will face higher taxes but may also gain a more level playing field. “Vietnam has been at a disadvantage compared to countries like Mexico, which enjoys zero percent tariffs while Vietnam faces up to 15.2 percent. If both are taxed at 25 percent, it will create fairer competition,” he said.
He added that while higher tariffs are daunting, they may encourage long-term industry improvements — such as promoting Vietnamese textile brands, increasing investment in local raw materials and raising the localisation rate to 60 percent by 2030. Many companies are already restructuring their supply chains to better manage risks.
Bracing for impact
Phung Quoc Man, chairman of the Ho Chi Minh City Association of Handicraft and Wood Processing, said Vietnam’s wood industry is forecast to achieve over USD 16 billion in export revenue this year, with around USD 9 billion, or 55 percent, from the US market. While concerns remain, companies are concentrating on completing existing shipments and drafting contingency plans.
The association has surveyed 50 major member firms, consulted 20 large FDI enterprises and met with 20 US buyers to discuss potential responses and coordination strategies.
“We’re planning for solutions after the grace period ends. Buyers and sellers must be ready to share the burden — maybe 50-50, or split three ways between sellers, importers and consumers. We’re also looking into ways to balance trade by increasing imports of production materials,” said Man.
Hoa called on government agencies to reduce administrative and business procedures by 30 percent, in line with Resolution 66. Streamlining red tape, he said, is essential to lowering operational costs for businesses.
Vietnamese exporters are also facing increased domestic competition, as exporters from other countries unable to enter the US shift their focus to Vietnam’s market.
“I propose that all ministries and sectors treat this issue with the same urgency applied to administrative reform and government streamlining. The government should assign specific reduction targets to each ministry with firm deadlines. Only then can we track which unnecessary procedures are actually being eliminated,” Hoa said.