President-elect Donald Trump claims his plan to impose high tariffs on imports to the U.S. will reduce the federal deficit, lower food prices, and create more domestic jobs. During a campaign event in Savannah, Ga., he pledged to “relocate entire industries” back to the U.S. “You’ll see a massive exodus of manufacturing from China to Pennsylvania, from Korea to North Carolina, from Germany to here in Georgia,” he said in September.
However, such actions are unlikely to happen, let alone on the scale and speed Trump desires. Instead, one country is poised to be the primary beneficiary of Trump’s policies: Vietnam.
“If it used to be made in China, now it will be made in Vietnam,” said Jason Miller, a professor of supply chain management at Michigan State University, in an interview with Forbes. “That production is not coming back to America.”
A Manufacturing Shift to Vietnam
During Trump’s previous administration, major foreign corporations such as Apple, Foxconn, and Intel began pivoting to Vietnam as a way to diversify their manufacturing portfolios. Two months ago, SpaceX announced a $1.5 billion investment in Vietnam. Even the Trump Organization has invested in the country, recently announcing a $1.5 billion luxury real estate project.
Now, the Southeast Asian nation is well-positioned to benefit even further from the anticipated anti-China sentiment under the incoming administration—especially if Vietnam acts quickly to streamline regulations, allowing businesses to move swiftly.
Vietnam’s Competitive Advantages
Vietnam holds several advantages over other regional rivals like India. First, as a single-party authoritarian state, Vietnam can implement business-friendly policies quickly. The country also boasts an advantageous geographic position, with three of the world’s 50 busiest container ports and proximity to China, facilitating trade and logistics between the two nations.
Critically, Vietnam has a free trade agreement with the European Union—making it the only regional country besides Singapore with such an agreement. (India is currently negotiating a deal, which would ease imports and exports between the EU and the world’s most populous nation.)
Additionally, Vietnam is rapidly upgrading infrastructure to support large-scale projects. A recent decision allows companies to purchase green energy directly from solar power producers rather than relying solely on state-owned utilities. This move has been applauded by major investors like Apple and Samsung, as well as the U.S. Embassy in Hanoi.
Trump’s Tariff Proposals
In recent months, Trump has reiterated his intention to promote American manufacturing by making foreign-made goods more expensive to import. He has highlighted Mexico and China, stating earlier this month that he would impose tariffs ranging from 25% to 100% on products made south of the border. Previously, he mentioned tariffs of 60% on goods made in China and 20% on products manufactured elsewhere, including Vietnam.
Despite this, Vietnam sees growth opportunities. “Vietnam could achieve moderate or significant success, depending on how it facilitates this wave of foreign direct investment (FDI),” said Anh Ngoc Tran, a professor of governance at Indiana University and former advisor to Vietnam’s prime minister.
Strategic Focus on High-Tech Industries
Tran suggested Vietnam should prioritize multinational companies that bring their ecosystems of suppliers, focusing on high-value industries. “If you bring in Apple, many suppliers will want to be near Apple—companies that allow Vietnam to transition to a more high-tech nation. Instead of producing footwear and textiles, Vietnam should target biotechnology, AI, and semiconductors,” he said.
This strategy represents a shift from Vietnam’s roots as a Southeast Asian manufacturing hub. Initially, the country gained a reputation in the 1990s for producing footwear and textiles for multinationals like Nike and Adidas. By the 2000s, major electronics companies began moving operations from China to Vietnam, attracted by low labor costs and favorable trade agreements.
Economic Impact
Vietnam’s trade deficit with the U.S.—the difference between what it exports and imports—has tripled since 2004. According to the U.S. Census Bureau, Vietnam now has the fourth-largest trade deficit with the U.S., following China, Mexico, and the EU.
When Trump’s first administration imposed tariffs on certain Chinese-made goods, such as solar panels and washing machines, in 2018, it did not persuade companies to bring production back home. Instead, manufacturing shifted to Vietnam and other Asian nations like Thailand, Malaysia, and India. However, Vietnam’s GDP has grown faster than its regional neighbors (except China), averaging 6.2% annually.
In May 2020, Apple began moving AirPod production from China to Vietnam. A few months later, Foxconn reportedly shifted some iPad and MacBook production to Vietnam at Apple’s request. U.S. International Trade Commission data shows that between 2018 and 2019, imports of electronics from Vietnam nearly doubled.
A Rising Export Powerhouse
Vietnam is capitalizing on the shift, expanding its export economy while producing goods for more than just U.S. consumers. Recently, Maersk announced the opening of its first bonded warehouse in northern Vietnam at the Haiphong port, with Amazon Vietnam as its inaugural client. Additionally, Lego revealed that its $1 billion factory in Binh Duong is nearing completion and will begin operations early next year.
Vietnam’s Adaptation to Trump’s Policies
Vietnam has also aligned itself with Trump’s interests. In early October, Eric Trump announced a $1.5 billion development project outside Hanoi, featuring a five-star hotel and golf course.
Domestic investors are also eyeing opportunities. Michael Kokalari, chief economist at VinaCapital, said he believes these trends will drive demand for logistics and green energy companies while fostering Vietnam’s growing middle class.
The Path Forward
Like companies that once moved to China, Trump’s tariffs could accelerate the shift to Vietnam. As production increasingly relocates, Vietnam is poised to secure its position as a key player in global manufacturing.
