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TRADE UPDATE OCT 2025: STRONGER-THAN-EXPECTED EXPORT PERFORMANCE

Vietnam’s trade activity continued to maintain solid growth momentum two months after the new tariff measures took effect. This outcome contrasts with our earlier expectations for several reasons: 1. Strong FDI-led growth: Vietnam’s tariff rates remain lower than China’s, and the issue of transshipment has not been further clarified. This has allowed Vietnam’s FDI sector to expand exports to the U.S. market and 2. Stable global demand: Despite ongoing trade tensions, global demand has remained resilient. In its latest report, the IMF raised its global growth forecast to 3.2% for 2025 and maintained 3.1% for 2026.
In 9M2025, Vietnam’s exports grew 16.4% YoY, led by electronics exports (+25.5%) and shipments to the U.S. (+27.7%). The FDI sector continued to outperform the domestic sector, with export growth of 21.6% versus 3.7%, respectively.
The trade surplus narrowed 16.5% YoY to USD16.8 billion. Within this, the FDI sector’s surplus declined slightly by 2.2% YoY, while the domestic sector’s trade deficit widened 9.6%.
The fastest-growing export categories to the U.S. market were toys, electronics, chemicals, and plastics & rubber. Meanwhile, key export products of the domestic sector - including seafood, wood products, footwear, and textiles & garments grew at a more moderate pace.
The U.S.–China trade tensions have escalated again. On October 10, the U.S. President announced a 100% tariff on imports from China, following recent measures restricting semiconductor exports from the U.S. and imposing rare-earth export controls by China over the past month.
We believe the renewed escalation may serve as a strategic bargaining move by both sides ahead of a potential Trump–Xi meeting at the APEC Summit in late October. Hence, tensions may cool down after the meeting. However, the deep-rooted structural conflicts between the two economies suggest that the U.S.–China trade war is far from over