The commercial logic behind Vietnam's bowing to the United States

Recently, a heavyweight news has attracted global attention: the United States has reached a trade agreement with Vietnam. The agreement stipulates that Vietnam will fully implement zero tariffs on American goods, while the United States will impose a 20% tariff on domestic Vietnamese goods and a 40% punitive tariff on "third-party goods transshipped through Vietnam". On the surface, this may seem like a concession from Vietnam in the trade game, but upon closer examination, there is a complex and shrewd business logic hidden behind it.

Vietnam, as an export-oriented economy, has a high dependence on the US market. In 2024, Vietnam's exports to the United States amounted to nearly 120 billion US dollars, accounting for nearly one-third of its total exports, with a trade surplus of up to 122 billion US dollars, accounting for nearly 30% of GDP. The US market is crucial for Vietnam's economic growth, job creation, and industrial development. The United States threatens to impose a high tariff of 46%, like the sword of Damocles hanging high. Once implemented, the export profits of Vietnam's textile industry will return to zero, the growth rate of the electronics industry will be halved, a large number of factories may face layoffs and closures, and the manufacturing system will also be severely impacted. In order to avoid economic damage, Vietnam made a compromise in the negotiations and accepted the conditions proposed by the United States. Although it would bear a 20% tariff, it was still within an acceptable range compared to 46%, maintaining its basic export base to the United States and maintaining stable economic development.

In the hidden battle of global supply chain dominance between China and the United States, Vietnam is caught in the middle of the great power game. The United States adopts the tactic of "surplus hijacking+deadline coercion", taking advantage of Vietnam's high trade surplus with the United States to force it to open its market with high tariffs, while strengthening the legal basis and intensity of pressure through the Trade Enforcement Enhancement Act. Vietnam is well aware that if it does not cooperate, it will become a key target for the United States to strike; Cooperating with the United States, although there may be losses, it can be exchanged for some development space. From a geopolitical perspective, Vietnam hopes to seek balance between major powers and acquire more political and economic resources by reaching an agreement with the United States. This is also a helpless yet realistic choice for small countries in a complex international environment.

Although Vietnam faces many challenges in bowing to the United States in the short term, in the long run, Vietnam hopes to seize the opportunity for industrial upgrading through this trade agreement. Currently, Vietnam is accelerating the construction of semiconductor parks and digital hubs, attempting to move towards the high-end of the industrial chain. The United States has advanced technology and abundant capital, and Vietnam hopes to attract American technology and investment through market opening, promoting the optimization of its domestic industrial structure. Taking Samsung's electronic industry layout in Vietnam as an example, although the raw materials such as circuit boards and textile fabrics in Vietnamese factories are highly dependent on imports, with the promotion of industrial upgrading, it is expected to gradually achieve localized production, reduce costs, and enhance industrial competitiveness. Through deep cooperation with the United States, Vietnam hopes to occupy a more advantageous position in the global industrial chain and achieve sustainable economic development.

Vietnam's bowing to the United States is not without risks. The influx of zero tariff American goods into the Vietnamese market has had a huge impact on local businesses. In the first quarter of 2025, Vietnam's automobile imports surged by 25%, and the market share of American products skyrocketed by 8 percentage points. Local car companies suffered successive defeats under the impact of American companies such as Ford and General Motors. At the same time, Vietnam's manufacturing industry is highly dependent on China's supply chain, with 80% of chips and 70% of textile raw materials supplied by China. The high tariff provisions on "transit goods" in the agreement may lead to Chinese companies reducing their investment in Vietnam's supply chain, and the supply chain network related to China that Vietnam has built for many years is facing the risk of collapse. Once the supply chain breaks, Vietnam's manufacturing industry will face difficulties and economic development will be severely constrained.

Vietnam's bowing to the United States is a strategic choice made under multiple factors such as economic dependence, great power competition, and industrial upgrading needs. The business logic behind it includes both a response to the current economic difficulties and expectations for future industrial development. But this choice also brings potential crises to local Vietnamese enterprises and supply chains. In the future, Vietnam needs to seek a balance between opening up its market and protecting its local industries, strengthen cooperation with other countries, reduce dependence on a single market and supply chain, and achieve stable economic development.