According to the "US Tariff Policies: Impact and Pathways" study published by PwC Vietnam on June 25, the new US tariff policy (effective April 2025) imposes up to 46 per cent tariffs on certain Vietnamese goods. Key sectors like apparel, shoes, wood, furniture, agriculture, and seafood are particularly hard hit, facing higher production costs, reduced long-term orders, and intensified competition from rivals in Mexico, Indonesia, and Malaysia.

PwC has conducted a survey to assess how Vietnamese manufacturing companies and related service providers are navigating these shifts. The survey found that Vietnamese manufacturing businesses are on high alert as they navigate the uncertain terrain shaped by US tariffs. 86 per cent of survey respondents expressed concern or deep concern about the tariffs' impact, with the remaining 14 per cent showed neutral or light concern.

Significant challenges anticipated from US tariffs include higher costs (23 per cent) and market shifts (15 per cent). This pervasive anxiety underscores the urgent threat that evolving US trade policies pose to the stability and growth of Vietnamese businesses. As they brace for potential financial and operational impacts, companies face the challenge of adapting to an increasingly competitive global landscape.

Against this backdrop, businesses are taking specific actions to prepare for or mitigate the potential impact. These actions can be categorised into three strategies. First is to reduce trade dependency and control high costs. Accordingly, 44 per cent of businesses are diversifying sourcing to other countries, while 34 per cent are negotiating with existing suppliers.

Another strategy is to enhance operational efficiency. In pursuit of this strategy, 40 per cent of businesses are automating and streamlining processes, while 32 per cent are improving efficiency/reducing waste. The third strategy is to protect long-term competitiveness. Specifically, 41 per cent of businesses are looking to diversify into new markets, while 25 per cent are adjusting pricing strategies.

The transformation journey of Vietnamese businesses begins with supply chains, where companies are realising the risks of overreliance on a single source like China. Diversifying suppliers, especially towards more stable regions, has become essential. At the same time, many are seeing the opportunity to renegotiate supplier contracts to better control costs and improve cash flow.

In production, the heart of operations, businesses are accelerating automation and adopting lean models to boost efficiency. Exporters and domestic manufacturers are actively integrating into local and foreign direct investment supply chains as a practical strategy to optimise costs and enhance competitiveness.

On the market front, as traditional export destinations become more unpredictable, Vietnamese companies are expanding into the EU, ASEAN, and Japan, leveraging the country’s strong network of free trade agreements. They are also refining pricing strategies and strengthening digital brand presence in existing markets to unlock untapped potential.

Finally, service providers, especially in logistics, consulting, banking, and insurance, are facing declining demand from export clients and rising credit risks. In response, they are diversifying their customer base and improving service quality to maintain resilience in a shifting landscape.

Responses to the survey were collected from a broad spectrum of companies operating in Vietnam, with 78 per cent from manufacturing and 22 per cent from services. Notably, 33 per cent of businesses export directly to the US, while 67 per cent don’t, offering a balanced view of both direct and indirect exposure.

Source: Vietnam Investment Review