One country that could avoid the worst of Trump 2.0 tariffs? Vietnam

Hanoi's diplomatic skills and the private interests of Trump and Musk in the country may shield it from the worst of the President-elect's threats.

- Bhavan Jaipragas

Few would dispute that Vietnam has been the undeniable star among the "Plus Ones" in the "China Plus One" strategy - the global approach to diversifying manufacturing away from China by anchoring in other politically stable and thriving economies.

Since the inception of the "Plus One" strategy in 2018 - sparked by Donald Trump's tariffs on China in his first stint as United States president - Vietnam has outpaced peers like Malaysia, Thailand, India and Turkey.

Excluding the pandemic years, Vietnam's economy has averaged an impressive 7 per cent annual growth during this period.

Economic data released this week shows that Vietnam continues to grow strongly, exceeding expectations with a 7.09 per cent expansion in 2024, supported by strong disbursed foreign direct investment and exports.

However, following Vietnam's coverage in the international media over the past few weeks, one might come away with the impression that the good times are poised to end abruptly when Trump begins his second term in the White House on Jan 20.

This doom narrative suggests that alongside countries already targeted by the incoming administration's planned tariffs - China, Mexico and Canada - Vietnam should also brace itself for a shock from the universal tariffs Trump has threatened.

The argument questions why Trump would single out these three countries over trade imbalances while giving Vietnam a pass, when Vietnam exports to the US nine times as much as it imports.

Vietnam's current account surplus with America exceeds US$100 billion (S$137 billion), ranking fourth after China, Mexico, and the European Union.

Moreover, this is the same Vietnam that Trump once labelled the "single worst abuser of everybody" in trade and initiated an abortive currency manipulation investigation against.