Vietnam Economic News: 8.2 – 15.2.2025
Summary of Vietnam Economic News: 8.2 - 15.2.2025
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Summary of Vietnam Economic News: 8.2 - 15.2.2025 ---
Vietnam open to boosting US agricultural imports as tariff risks rise
Reuters News – 14 February 2025
Vietnam stands ready to import more farm products from the United States after U.S. President Donald Trump said he would start imposing global reciprocal tariffs. Vietnam’s export hub, home to manufacturing operations of multinationals including Apple and Samsung, could be hit hard by any new tariffs. Last year, it posted a record $123.5 billion trade surplus with the U.S., the largest after China, the European Union and Mexico. More than one-fourth of U.S. exports to Vietnam last year were agricultural products, mostly cotton, soybeans and tree nuts, for a total value of $3.4 billion, according to U.S. government data. A White House official, who spoke to reporters on Thursday before Trump ordered his team to devise a plan on reciprocal tariffs, said the administration would study countries with the biggest trade surpluses and highest tariffs first. Among top U.S. trading partners, Vietnam is one of the countries with the largest tariff gaps, charging higher import duties than those applied by the United States. Vietnam imposes average import duties of 9.4%, according to the World Trade Organisation. Last week, the government of the exportreliant country, whose largest market is the United States, set up a working group to address any rising risks from trade tensions.
Trump has not explicitly mentioned Vietnam as a trade target, but new 25% tariffs imposed this week by the U.S. on steel and aluminium have already hit the nation. Many of Vietnam's steel exports to the U.S., however, had already faced 25% duties, making that blow less heavy than on other exporters, one industry official said. For Vietnamese aluminium, pre-existing U.S. tariffs had been at 10%, according to Do Ngoc Hung, Vietnam's trade representative in the United States. To reduce the trade surplus, Vietnamese officials have discussed with the Trump administration the possible purchase of U.S. liquefied natural gas, multiple officials said. Vietnamese budget carrier VietJet has also agreed to buy 200 Boeing 737 MAX jets in a multi-billion dollar deal first signed in 2016 and revised afterwards. No plane has yet been delivered although the company had said it expected to receive the first jets last year. Vietnam has also been in talks to buy Lockheed Martin C-130 Hercules military transport planes, officials have said. The Trump Organization has also agreed to develop a $1.5 billion golf course in Vietnam, its local partner said in October.
Vietnam to use Chinese loans for $8.3 billion railway linking both countries
Reuters News – 13 February 2025
Vietnam plans to take loans from the Chinese government to partly fund a $8.3 billion project to build a new railway linking the two countries, according to the transport minister. Vietnam has been seeking to upgrade its aging railway systems and has approached China for funding and technology. "Vietnam's current railway system is outdated, and the country needs a new system to support its economic development," transport minister Nguyen Hong Minh told parliament. The 391 km (243 mile) railway will run from the border city of Lao Cai through capital city Hanoi to Haiphong that houses the largest seaport in northern Vietnam, Minh said. The railway will have a gauge of 1,435 millimetres and will allow trains to operate at a speed of up to 160 kph (99 mph). It is designed to transport passengers and cargo. Construction of the railway is expected to start this year and be completed by 2030, he said. Parliament is scheduled to vote on the railway project next week during its ongoing meeting in Hanoi. In November, lawmakers also approved a resolution supporting a $67 billion, 1,541 km (958-mile) high-speed rail that would link Hanoi with business hub Ho Chi Minh City, targeting the start of operations in 2035.
Vietnam to raise 2025 GDP growth target to at least 8% despite U.S. tariff risks
Reuters News – 12 February 2025
Vietnam will officially revise up its gross domestic product growth target for 2025 to at least 8.0% from 6.5%-7.0%, driven by stronger industrial manufacturing, Minister of Planning and Investment Nguyen Chi Dung said on Wednesday. The new target comes as Vietnam, an export-reliant economy, is confronting the risks from intensifying global trade disputes, including new duties on its steel exports to the United States. Imports and exports are both expected to grow 12% this year, and the trade surplus is estimated at $30 billion. According to Minister Dung, Vietnam would face a mixture of opportunities and challenges this year, "but the challenges are more prominent, threatening to leave significant impacts on the economy."
ANZ Research said in a note on Wednesday the mix of U.S. tariffs, weak demand in China and a strong U.S. economy was changing the export environment for Asian economies. Vietnam's trade surplus with the United States hit a record high of more than $123 billion last year, U.S. data showed. "Vietnam stands out as the most exposed to higher across-the-board U.S. tariffs and being a priority target if the U.S. focuses on economies among the top contributors of the U.S. trade deficit," ANZ Research said. The country grew 7.09% last year, making it one of the fastest-growing economies in Asia.
Dung said industrial manufacturing and foreign investment would lead this year's economic growth, noting that the industrial production and construction sector is expected to grow 9.5%. Foreign investment inflows are expected to be $28 billion, while domestic retail sales are expected to rise 12%, he said. According to Dung, the country will also prioritise keeping inflation under control and ensuring macro stability, while inflation is expected to be 4.5%- 5.0% this year. The revised GDP growth target is subject to approval from the parliament, which began a week-long meeting on Wednesday.