The US tariffs 2025 update has reshaped the trade landscape for Asian exporters. Vietnam, like its ASEAN neighbors, now faces reciprocal tariff measures as part of the US’s new trade strategy. At first glance, higher duties might appear to weaken competitiveness, but a deeper look reveals that Vietnam exports remain resilient. Compared to other ASEAN economies, Vietnam continues to stand out as a long-term sourcing hub for global buyers.
Comparing US Tariffs Across ASEAN
The new tariffs vary significantly across ASEAN. Vietnam faces an average 20% tariff, placing it in the mid-range of the region. This is higher than Singapore at 10% but lower than Laos and Myanmar, where rates climb as high as 40%. Thailand and Malaysia sit close to Vietnam at around 19%.
This middle position creates both challenges and opportunities. On one hand, Vietnam must adapt to ensure its products remain price competitive. On the other, it benefits from not being at the extremes: neither penalized as heavily as the least-developed ASEAN members, nor burdened with high domestic costs like Singapore. For sourcing decisions, this balance makes Vietnam attractive to buyers seeking cost efficiency with reliable capacity.
In this video, you’ll find a breakdown of the latest U.S. tariff updates, their impact on Vietnam and ASEAN exporters, and the strategies businesses can adopt to stay competitive in a shifting global trade environment.
Vietnam’s Key Sourcing Industries
Despite tariff pressures, Vietnam exports continue to be anchored by strong industries that Over the past two decades, Vietnam’s sourcing capabilities have matured across several key industries:
- Textiles and Garments: Vietnam remains one of the top apparel exporters worldwide. Its competitive labor costs and advanced compliance standards make it a preferred sourcing destination for US and EU buyers.
- Wood and Furniture: As a leading exporter of wooden furniture to the US, Vietnam offers a well-developed, price-competitive, and environmentally certified supply chain, making it an attractive sourcing hub.
- Electronics: With major players like Samsung, Foxconn, and Intel operating locally, Vietnam has become a vital electronics manufacturing and sourcing hub for global brands.
- Footwear and Consumer Goods: Increasingly, global brands are shifting orders to Vietnam to diversify sourcing away from China, leveraging Vietnam’s reliable manufacturing base.
These sectors are backed by a skilled workforce and an extensive network of suppliers capable of handling large-scale OEM and ODM production. While tariffs can increase costs, Vietnam’s ability to produce at scale while maintaining quality makes it a strong and reliable sourcing destination.
How FDI Strengthens Vietnam’s Sourcing Competitiveness
A major reason Vietnam continues to hold its ground lies in its strong base of foreign direct investment (FDI). South Korean, Japanese, and Taiwanese companies have poured billions into the country, setting up export-oriented factories across key industrial zones. Foxconn, for example, has expanded production in the northern provinces.
This FDI-driven ecosystem ensures that Vietnam’s production capabilities are not limited to low-value goods but extend into high-tech manufacturing, semiconductors, and consumer electronics. With global brands already deeply invested, supply chain relocation due to tariffs becomes less likely. Instead, many companies are doubling down on their Vietnam operations as part of the China+1 strategy.
Vietnam’s Sourcing Advantage: Infrastructure and Logistics
Infrastructure remains a critical factor in evaluating sourcing destinations. Vietnam has invested heavily in new expressways, expanded port facilities, and modern logistics parks. Ports such as Hai Phong Port, Da Nang Port, Quy Nhon Port, Cat Lai Port, and Cai Mep–Thi Vai Port now accommodate deep-sea vessels, reducing dependence on transshipment hubs in Singapore or Hong Kong.
This continuous improvement gives Vietnam an edge over neighbors such as Laos and Myanmar, where underdeveloped logistics add to export costs. Although Thailand and Malaysia maintain stronger infrastructure overall, Vietnam is closing the gap quickly. For buyers, this means more reliable lead times and better cost control when sourcing from Vietnam.
ASEAN-Wide Opportunities for Sourcing: Beyond Tariffs
The rise in reciprocal tariff policies highlights the importance of regional trade alliances. Vietnam is uniquely positioned as it participates in multiple free trade agreements:
- EVFTA (EU–Vietnam Free Trade Agreement) grants Vietnamese products reduced duties into the European Union.
- RCEP (Regional Comprehensive Economic Partnership) strengthens Vietnam’s role in Asian supply chains, especially with Japan, Korea, and China.
- CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) expands access to markets like Canada, Australia, and Mexico.
By leveraging these agreements, Vietnamese exporters can offset part of the pressure from US tariffs through diversification. ASEAN itself also provides synergies: while Singapore excels in finance, Malaysia in electronics, and Thailand in automotive, Vietnam brings together cost competitiveness, scale, and favorable trade networks.
Vietnam vs China: Strategic Sourcing Comparison
While China faces 30% tariffs under the US system, it remains the world’s largest exporter. Yet many companies are reluctant to concentrate production solely in China due to geopolitical risks and tariff exposure.
Here, Vietnam benefits from the China+1 strategy, where global manufacturers maintain a base in China but expand production into Vietnam to spread risk. Even with a 20% tariff, Vietnam offers a lower total landed cost when considering labor, compliance, and logistics efficiency. For US buyers, diversifying supply chains through sourcing from Vietnam is often cheaper and less risky than staying solely in China.
Long-Term Sourcing Outlook: Vietnam’s Central Role in ASEAN
The US tariffs 2025 update is not the end of Vietnam’s export growth story. Instead, it marks the beginning of a more diversified strategy where Vietnam strengthens its ASEAN positioning while moving up the value chain.
Vietnam’s resilience lies in a combination of factors: mid-range tariffs that still allow price competitiveness, industry strengths in textiles, furniture, and electronics, strong FDI-driven capacity, and rapidly improving infrastructure. When combined with ASEAN trade agreements and global diversification strategies, Vietnam secures its role as a long-term sourcing hub.
Conclusion
Tariffs are reshaping global trade, but they are not erasing Vietnam’s advantages. While reciprocal tariff measures increase costs, Vietnam exports continue to thrive thanks to strong industry clusters, FDI commitments, and improved logistics. For companies planning sourcing from Vietnam, the long-term outlook remains positive.
When compared to its ASEAN neighbors, Vietnam stands out as the optimal balance between cost, capacity, and connectivity. Even as US tariffs 2025 reshape trade flows, Vietnam remains at the heart of the ASEAN manufacturing ecosystem, offering global buyers a reliable and competitive sourcing destination.