Global Economic Outlook and Its Impact on Vietnam in 2025
As we enter 2025, the global economy is expected to continue its recovery, with the International Monetary Fund (IMF) forecasting global GDP growth at 3.1%, slightly higher than the 3.0% recorded in 2024. However, this recovery remains uneven across regions due to various factors, including China’s economic slowdown, new U.S. tariff policies, and prolonged uncertainties within the European Union (EU). These fluctuations could directly impact global trade and investment, presenting both opportunities and challenges for economies such as Vietnam.
U.S. Tariff Policies and Opportunities for Vietnam
The administration of President Donald Trump continues to pursue a protectionist trade policy with high import tariffs, ranging from 25% to 60%, on Chinese goods. This situation creates favorable conditions for Vietnam, positioning it as a key trade partner of the U.S. According to a report by FPT Securities (FPTS), Vietnamese exports to the U.S. benefit from tariffs that are 15 to 50 percentage points lower than those imposed on Chinese goods, particularly in the production materials sector.
In 2024, Vietnam’s exports to the U.S. reached $405.5 billion, marking a 14.3% increase from the previous year. Forecasts for 2025 indicate that export growth will remain in the double digits, driven by key sectors such as textiles, electronic components, and processed wood products. Notably, production materials—accounting for 37% of Vietnam’s total exports to the U.S.—are expected to maintain an average annual growth rate of 40%.
Despite benefiting from U.S. tariff policies, Vietnam faces the risk of origin fraud investigations. If the U.S. detects that Chinese-origin goods are being rerouted through Vietnam to evade tariffs, additional tariffs or trade restrictions could be imposed. Vietnam previously encountered similar pressure in 2020 when its trade surplus with the U.S. reached $80 billion.
China’s Economic Stimulus Package and Its Impact on Vietnam
China, Vietnam’s second-largest trading partner, has launched a massive economic stimulus package worth 10 trillion yuan (approximately $1.4 trillion), equivalent to 8% of its GDP, to boost growth. This program focuses on infrastructure investment, support for small and medium-sized enterprises (SMEs), and raising the minimum wage to stimulate domestic consumption.
These policies open up opportunities for Vietnam, particularly in agricultural and processed food exports. In 2024, China accounted for 40% of Vietnam’s total rice export value, reaching $4 billion. Other key exports such as seafood, fruits (including dragon fruit, mango, and durian), and coffee are also expected to experience strong growth in 2025.
Furthermore, the ongoing shift in global supply chains is helping Vietnam attract more foreign direct investment (FDI) from China. In 2023, FDI inflows from China into Vietnam totaled $4.5 billion—the highest level since 2019—mainly targeting the electronics, renewable energy, and manufacturing sectors. In 2024, China remained one of Vietnam’s largest foreign investors, accounting for 13% of total registered FDI. This trend is expected to continue in 2025, as Chinese companies increase investments in Vietnam to circumvent U.S. tariff barriers.
Impact of the EU and Other Regions
The European Union (EU) faces significant economic challenges, including the risk of prolonged recession due to energy supply disruptions from the Russia-Ukraine conflict and political instability in some member states. In 2024, EU GDP growth was only 0.8%, falling short of previous forecasts. However, the European Central Bank (ECB) is implementing a roadmap to cut interest rates to support economic growth, with a target of reducing the deposit rate to 2% by the end of 2025.
The EU’s economic recovery could provide significant opportunities for Vietnam, especially in key export industries such as textiles, processed wood, and electronics. In 2024, Vietnam’s exports to the EU reached $46.5 billion, accounting for 13% of total export value. Forecasts suggest that this figure will grow by 12.5% in 2025, supported by free trade agreements such as the EU-Vietnam Free Trade Agreement (EVFTA), which grants preferential tariff rates to Vietnamese goods.
However, Vietnamese businesses must also contend with increasingly stringent EU regulations on environmental standards, carbon emissions, and product quality. Failure to meet these requirements could result in higher production costs and the risk of losing market share in Europe.
Beyond the EU, other key markets such as Japan, South Korea, and ASEAN continue to play a crucial role in Vietnam’s export activities. Japan is implementing an economic stimulus package worth 39 trillion yen (approximately 6% of GDP), which is expected to boost domestic consumption, particularly for imported goods such as food and textiles from Vietnam. Meanwhile, South Korea and Singapore remain major investors in Vietnam, with FDI inflows accounting for 10% and 13% of total foreign investment in 2024, respectively.
Outlook for Vietnam in 2025
The year 2025 will be a critical period for Vietnam as the global economy continues to evolve. With careful preparation and flexible policy management, Vietnam can seize opportunities from the shifting international economic landscape to strengthen its position in the global supply chain and sustain long-term economic growth.
