Vietnam’s economy is soaring towards a record US$920 billion in total trade for this year, with exports expected to surpass US$470 billion, marking a robust 16% increase over last year, according to the Ministry of Industry and Trade ( MoIT ).

This remarkable performance places Vietnam among the top 15 largest global trading nations. And it has occurred in a year dominated by US tariff volatility, which, in turn, has unexpectedly accelerated a vital structural shift in the Southeast Asian nation.

The year’s turbulence began in April 2025, when US President Donald Trump announced his “Liberation Day” tariffs against trading partners. Vietnam initially faced a 46% tariff rate, but, through negotiations, it was quickly reduced, putting the country within the 20% tariff bracket, on par with other major Asean emerging markets.

Tech-driven export shift

The initial tariff shock did not deter exporters, an outcome labelled as the "ironic tariff impact" by HSBC in its report "Vietnam at a glance" this December. Rather than receding, Vietnam’s export growth to the US came out "even stronger than in 2024". The momentum has increased the US's share in Vietnam’s export portfolio to a high dependency ratio of 32%.

HSBC notes that Vietnam’s macro indicators showed "much better-than-expected outcomes". The average export growth so far this year is running at an impressive 28% year-on-year, and close to 30% on a three-month moving average, highlighting the country’s surprising resilience when compared to most regional peers.

This resilience is fundamentally driven by a rapid, industry-wide shift in the composition of goods. According to HSBC, electronics products have now surpassed light manufacturing goods – a traditional Vietnamese export staple including textiles and footwear – to become the top export category to the US market since the beginning of 2025.

This is a definitive break from the past. In 2013, light manufacturing accounted for 60% of goods exports to the US, while electronics were a marginal 13%. The trend has shifted swiftly, with electronics growing from only one-seventh the volume of light manufacturing in 2013 to almost on par by 2024, before taking the lead this year.

The successful pivot has been largely credited to consistent, high-magnitude foreign direct investment ( FDI ). Driven by global investment, particularly in the wake of US-China trade tensions, Vietnam has elevated its importance in final electronics assembly. Samsung's decades-long commitment, dating back to 2007, has resulted in Vietnam producing half of the Korean group’s smartphones worldwide.

Moreover, the presence of US chipmaker Intel, with its US$1.5 billion assembly and test facility in Ho Chi Minh City, is positioning the Southeast Asian country in the higher value-added segment of processor ICs. While total FDI saw an 8% year-on-year decline in 2025 year-to-date, manufacturing inflows remain sizeable and around the pre-Covid average.

Tariff saga not over yet

While confirming the record US$920 billion trade target for 2025, Vietnamese officials stressed that the foundation for growth remains fragile.

At a December 16 trade forum in Hanoi, MoIT cites the country's 10th consecutive year of trade surplus in 2025. This sustained surplus, the officials note, plays a crucial role in creating stable foreign currency sources, reducing pressure on the exchange rate, and strengthening the country's foreign exchange reserves.

However, Tran Thanh Hai, deputy director of the import-export department under MoIT, points out the primary structural challenge: export growth's "over-reliance on the FDI sector". He notes that the contribution from domestic companies remains "not commensurate".

Furthermore, the global trade environment is becoming increasingly difficult, shifting towards regionalism and protectionism, which in turn is leading to a proliferation of technical barriers. MoIT has called for a strategic and "powerful shift" from an extensive, volume-based model to a "deep, efficient, and sustainable" one, demanding higher value-added content, increased technological application, and greater domestic input ratios to optimize logistics and build brand strength.

HSBC warns that Vietnam’s trade outlook is still subject to significant downside risks, noting that the tariff saga is "not over yet". The government still awaits final clarity on a potential 40% transshipment tariff and sectoral tariffs on semiconductors – verdicts that will significantly impact Vietnam’s trade and growth into 2026.

This November, S&P Global’s Purchasing Managers’ Index ( PMI ) for Vietnam remained expansionary at 53.8, down slightly from 54.5 in October but still signalling a solid monthly improvement in business conditions in the manufacturing sector. S&P Global uses 50 as the critical threshold, with readings above 50 indicating expansion or growth.

Crucially, the November index for Vietnam for new export orders expanded at a faster pace for the second consecutive month. However, the same month saw headline inflation accelerate to 3.6% year on year, overshooting market expectations due to a temporary 12% jump in vegetable prices caused by recent catastrophic flooding across the nation. This impact on inflation is expected to be temporary, keeping the rate well below the State Bank of Vietnam’s 5% ceiling.