Vietnamese tariffs benefit emerges, ASEAN manufacturing landscape undergoes a dramatic change

As U.S. tariffs on China continue to escalate, the global manufacturing landscape is undergoing a historic reshuffle. Who are the biggest winners? According to the latest regional economic analysis by ING Group, Vietnam’s tariff advantages are becoming increasingly prominent, rapidly transforming it into the largest manufacturing hub in ASEAN, capturing market share from other regional competitors.

Manufacturing Shift Triggered by U.S. Tariff Policies

Over the past year, U.S. tariffs on China have been steadily increasing, prompting multinational companies worldwide to rethink their supply chain strategies. This trade war has directly led to a new phenomenon: manufacturing moving rapidly to Vietnam.

The reason is simple—Vietnam possesses all the key factors to succeed in this era. First, its labor costs are the most competitive within ASEAN, which is crucial for cost-sensitive manufacturing. Second, Vietnam has signed numerous free trade agreements with major economies including the U.S., China, and the EU, offering the most favorable tariff treatments for exports. Third, industrial zone infrastructure is continuously improving, capable of supporting large-scale capacity shifts. Lastly, a relatively stable political environment provides confidence for long-term investments.

The combined effect of these four advantages makes Vietnam’s tariff environment significantly more favorable compared to other ASEAN countries.

The Truth Behind Multinational Giants’ Footprint in Vietnam

Numbers speak volumes. According to ING Group statistics, Vietnam attracted $36.6 billion in foreign direct investment in 2024, a 15% year-over-year increase, leading the ASEAN region in growth. This capital isn’t flowing into nothingness but is actively transforming Vietnam’s industrial landscape.

The operation of Samsung’s largest global smartphone factory and Apple’s suppliers across the country are no coincidences—they are the inevitable results of Vietnam’s tariff advantages and cost competitiveness. More notably, the influx of these leading companies has spurred the entire ecosystem’s prosperity, from component suppliers to logistics providers, rapidly improving Vietnam’s manufacturing supply chain.

Electronics manufacturing has become Vietnam’s star industry. Data shows electronics account for 42% of total exports, followed by textiles (15%) and machinery (12%). This export structure optimization reflects the continuous clustering of high-value-added industries.

Vietnam’s Strength Compared to Neighboring ASEAN Countries

A clearer comparison highlights Vietnam’s leading edge. ASEAN export growth rates show:

Vietnam’s export growth rate in 2025 is projected at 10.3%, far surpassing Thailand (6.8%), Malaysia (7.2%), Indonesia (5.9%), and the Philippines (6.4%).

This reflects the differing capacities of these countries to respond to Vietnam’s tariff and trade policy changes. While Thailand benefits from automotive manufacturing, it faces challenges in electronics. Malaysia maintains advantages in semiconductors but has slow growth in consumer goods. Indonesia relies on natural resources but has weak manufacturing competitiveness. The Philippines makes progress in BPO but has limited gains from physical product exports.

In contrast, Vietnam’s diversified industrial structure and comprehensive competitive advantages stand out.

How U.S.-China Trade Tensions Are Benefiting Vietnam

Ongoing trade tensions between the U.S. and China essentially create opportunities for Vietnam. As multinational companies are forced to adopt “China+1” strategies, Vietnam, due to its proximity to China, well-developed infrastructure, and friendly trade relations with both the U.S. and China, naturally becomes the top choice.

Currently, the U.S. remains Vietnam’s largest export market, accounting for about 30%. Meanwhile, trade in intermediate goods between Vietnam and China continues to grow strongly. This “balancing act” in trade maximizes Vietnam’s gains amid the global economic reshuffle.

The core of Vietnam’s tariff advantage lies in its ability to find a balance between the U.S. and China, avoiding over-reliance on a single market while leveraging geographic and policy benefits.

Infrastructure Investment to Strengthen Long-term Competitiveness

Vietnam is not resting on its laurels. According to plans, the country aims to invest $120 billion by 2030 in infrastructure development, including ports, roads, and logistics hubs. This investment will further solidify Vietnam’s central position in regional supply chains.

At the same time, Vietnam’s labor force exceeds 57 million, with ongoing skills development providing continuous talent support for manufacturing upgrades. These factors together lay a solid foundation for long-term economic growth.

How Will the Regional Economic Landscape Evolve?

Vietnam’s rising economic stature is reshaping ASEAN’s regional dynamics. Other member countries face increased competitive pressure, but this isn’t necessarily a bad thing. Under the Regional Comprehensive Economic Partnership (RCEP), ASEAN nations’ coordinated cooperation could improve through unified trade policies and infrastructure connectivity, leading to broader economic benefits.

In other words, Vietnam’s rise could serve as a catalyst for overall ASEAN development rather than a simple zero-sum game.

FAQs

Q: Why does ING Group consider Vietnam the biggest beneficiary of Vietnam’s tariff policies?

A: Vietnam combines competitive manufacturing costs, an extensive free trade agreement network, strategic geographic location, and relative political stability—creating optimal conditions to capitalize on the industry shifts triggered by U.S. tariffs.

Q: Which industries are developing fastest in Vietnam?

A: Electronics manufacturing leads, especially smartphones and component production, followed by textiles, furniture, auto parts, and machinery. This diversification enhances Vietnam’s economic resilience.

Q: How do Vietnam’s tariff advantages affect other ASEAN countries?

A: While facing increased competition, ASEAN countries can turn this into a driver for regional cooperation through frameworks like RCEP. There remains ample room for industry specialization and collaboration within ASEAN.

Q: What are the main challenges Vietnam will face in the future?

A: Rapid growth may strain infrastructure, increase labor costs, complicate regulations, raise environmental standards, and face potential shifts in global trade policies.

Q: Can Vietnam’s growth trend continue?

A: Based on current policy support, infrastructure investments, and industry diversification, Vietnam’s growth appears sustainable. However, long-term performance will depend on how effectively it manages the above challenges.