FREE

TRADE UPDATE SEP 2025: FDI AND ELECTRONICS DRIVE EXPORT GROWTH

Despite the new tariffs that came into effect in early August, Vietnam’s exports remained fairly strong, rising 14.8% YoY. Similar to the previous month, the FDI sector continued to serve as the backbone of exports (+27.3%), while domestic exports dropped sharply (-15.7%).
A positive development in last month’s trade performance was the widening trade surplus, which increased from USD2.3 billion in the previous month to USD3.7 billion, driven by an expanding surplus in the FDI sector and a narrowing trade deficit in the domestic sector.
By product category, except for seafood, chemicals, and transport vehicles, the FDI sector recorded superior export growth. The most notable contrasts were seen in the divergent performance of paper and electronics, as well as the significant growth gap in agricultural products, plastics, rubber, textiles, footwear, and handbags.
The strong export growth was largely driven by the electronics sector (+36.9% YoY), which contributed 80% to the overall export growth. This momentum is expected to be sustained, given the robust increase in electronics imports (+41.9% YoY, contributing 76% to import growth).
By export market, shipments to the US have moderated but still maintained a high growth rate (+18% YoY), while exports to non-US markets remained resilient (+17% YoY). Notably, exports to China registered a strong gain of over 22% for the second consecutive month.
The new tariffs have affected demand for Vietnamese exports to the US such as seafood, agricultural products, textiles, and garments. However, some tariff-affected goods such as chemicals, plastics, rubber, paper, and toys still recorded solid growth. This likely reflects a shift in trade flows, as Vietnam’s retaliatory tariffs remain significantly lower than those of China.
President Trump’s retaliatory tariffs are currently facing legal challenges, with the Federal Appeals Court ruling that the President exceeded the authority granted under the International Emergency Economic Powers Act (IEEPA). In the meantime, the tariffs remain in place at least until the Supreme Court issues a final ruling, expected in Q42025 or Q12026.
On August 27, the US officially imposed a 50% tariff on Indian goods, which is considered a favorable development for Vietnam’s trade prospects. In mid-September 2025, the U.S. and China will commence their fourth round of negotiations, with the addition of TikTok-related issues on the agenda. This round is expected to pave the way for a meeting between President Trump and President Xi Jinping at the APEC Summit in South Korea in October.