Vietnam beats trade targets in Q1, but faces US tariff risk

Vietnam’s trade soared in Q1, but US tariff threat casts shadow. Chart Source: Ministry of Finance

According to the Ministry of Finance, Vietnam’s trade volume in March alone hit $75.39 billion, up 18.2 per cent from February and 16.6 per cent from the same period last year. Q1 export turnover climbed 10.6 per cent to $102.84 billion, while imports rose by 17 per cent to $99.68 billion, resulting in a trade surplus of $3.16 billion.

Domestic enterprises recorded export revenue of $29.02 billion, up 15 per cent, accounting for 28.2 per cent of the total. Meanwhile, the foreign-invested sector, including crude oil, contributed $73.82 billion, up 9 per cent.

During the first three months of the year, 18 export commodities surpassed the $1 billion mark, making up 84.5 per cent of total export value. Five of these items exceeded $5 billion, representing nearly 60 per cent of total exports.

On the import side, the domestic sector brought in $36.78 billion, up 19.3 per cent, while foreign-invested enterprises imported $62.9 billion worth of goods, up 15.8 per cent. Notably, 17 import items exceeded $1 billion in value, comprising 77.2 per cent of total imports.

While the performance exceeded expectations, outpacing the Ministry of Industry and Trade's Q1 growth scenario of 7.9 per cent, the outlook is clouded by the potential impact of US tariffs.

Speaking at the government’s March meeting and an online conference with local authorities, Minister of Finance Nguyen Van Thang confirmed the positive performance but also warned of escalating risks. “If the 46 per cent tariff is widely applied, it would significantly affect exports to the US, with spillover effects on manufacturing, business confidence, foreign and private investment, consumption, and employment,” he said.

A preliminary survey by the Ministry of Finance identified five export groups likely to be most affected, including electronics and computers; textiles and garments; wood and wooden products; seafood; and machinery and equipment. These are all high-export-value sectors and major job creators.

While short-term effects may be muted, thanks to businesses ramping up exports and stockpiling in previous months, longer-term consequences are expected to be more pronounced.

To address the situation, the government is actively pursuing diplomatic and trade solutions. A recent phone call between Vietnamese Party General Secretary To Lam and US leadership has opened a "window of opportunity" for negotiations, according to the Ministry of Finance. However, coordinated and urgent actions across diplomacy, trade, and policymaking are needed.

At the same time, Vietnam is preparing contingency measures to support businesses and workers should the US proceed with the tariff hike. The Ministry of Finance emphasised the importance of issuing timely policies to mitigate negative impacts on the economy, market sentiment, investors, and business liquidity.