By Gloria Nosa
Vietnam’s Factories in Limbo Amid U.S. Tariff Uncertainty
Factories in Vietnam are facing a period of significant uncertainty as the nation attempts to persuade Washington to scale back its proposed tariffs on Vietnamese imports. The decision by U.S. President Donald Trump to pause his “reciprocal” tariff policy has sparked a dramatic shift in the country’s manufacturing landscape, leaving businesses scrambling to adapt to the unpredictability of the situation.
One such business owner, Jayson Wu, the Chinese owner of a furniture factory in Hanoi, has been working tirelessly since the announcement of the tariff suspension. Before the pause, Wu’s business had ground to a halt as his U.S. clients canceled orders in anticipation of the higher duties. However, with the suspension in place, his clients have quickly returned, placing urgent orders with a 90-day deadline.
“I lost a lot of business when the tariffs were set to hit, but now the orders are flooding back,” Wu explained, noting that his clients are anxious to secure shipments before any potential changes to the tariff situation. His factory, which relocated to Vietnam in 2019 to avoid U.S. anti-dumping duties targeting China, is one of many businesses caught in the crossfire of unpredictable tariff policies.
Vietnam’s giant export sector is feeling the strain, with the country caught between the U.S. and China in an ongoing trade conflict. The Southeast Asian nation has benefitted from an influx of Chinese investment as companies seek to shift production to Vietnam to avoid the U.S. tariffs. However, recent proposed tariffs on Vietnamese goods have threatened to derail this advantage. The U.S. had planned to impose a 46% duty on imports from Vietnam, which would have been devastating for exporters like Wu. Fortunately, Trump’s decision to suspend the higher duties for 90 days has granted manufacturers a temporary reprieve.
This temporary suspension has left the situation in limbo, with most manufacturers speculating that the final tariffs may not be as high as initially proposed—possibly ranging between 10% to 20%. As Zou Haoxue, a shelf factory owner in Hanoi, points out, “We believe the final tariffs won’t be that high. If it’s 20%, we can share the cost with our American customers. It will hurt, but it won’t break us.”
Despite the uncertainty, Vietnam continues to push for a more favorable outcome. Hanoi has made efforts to convince Washington to lower the tariff rate to a more manageable range of 22% to 28%. To strengthen its case, the Vietnamese government has offered to reduce tariffs on U.S. goods and is stepping up efforts to crack down on Chinese goods being diverted through its territory. At the same time, Chinese President Xi Jinping is urging deeper cooperation with Vietnam during his visit to the country, suggesting that Chinese businesses will benefit from a fair business environment.
For many in Vietnam’s manufacturing sector, the uncertainty has brought a sense of helplessness. Tian, an electronics factory owner who supplies companies like Nvidia and Foxconn, is concerned about the long-term impact of the U.S. tariffs. “If the tariffs go into effect, it’s like waiting to die. We’re powerless in this great power game,” she said, acknowledging the difficulty small businesses face as they navigate the shifting trade landscape.
Despite the challenges, Vietnam has emerged as a key beneficiary of the U.S.-China trade war, absorbing production capacity in industries ranging from apparel to electronics. However, the looming uncertainty surrounding U.S. tariffs has left many manufacturers feeling exposed, with the future of their businesses hanging in the balance.
As Vietnam continues to negotiate with the U.S. and adjust its policies to cope with shifting trade dynamics, its factories will need to remain agile and prepared for any changes in the tariff landscape. The next few months will be critical in determining whether the nation can continue to thrive as a manufacturing hub or whether the weight of international trade tensions will undermine its progress.
