Zürcher Nachrichten - Vietnam shrugs off Trump tariffs as US exports surge

It will adorn luxury hotels and residences across the Middle East, Europe and the United States, where the Vietnam-based Jonathan Charles furniture company has largely shrugged off US President Donald Trump's tariffs.

The US orders that account for more than half of the firm's business remained steady in 2025, its CEO said this week, validating an earlier prediction his operation would weather the tariffs.

"My initial reaction was panic for one hour," chief executive Jonathan Sowter said of the 20 percent across-the-board tariffs announced by Washington in July.

"But after thinking about it for a while, I realised it's a level playing field. All my competitors are in Asia," he told AFP in November.

"Just adding 20 percent tariffs on Vietnamese products doesn't mean America can make it cheaper than Vietnam. America will be double the price or triple the price to make what we make."

Vietnam has proved surprisingly resilient in spite of US levies many feared would crush its export-oriented growth model.

It saw a 28 percent surge in exports to the United States last year while its trade surplus swelled to $134 billion, according to official figures released this week.

Its economy grew at eight percent, beating analyst expectations and likely outpacing the rest of Asia, according to HSBC.

"Although Vietnam was widely expected to be one of the economies with high tariff risks, its trade was not disrupted, but ballooned to a record high instead," the bank's ASEAN economist Yun Liu said Thursday in a note to clients.

"Despite facing a 20 percent headline tariff from the US, Vietnam captured even more market share for certain goods, such as footwear, textiles and consumer electronics."

- 'Optimistic' -

Not all Vietnamese manufacturers have been left unscathed. Lower-end producers with smaller margins in particular have suffered, with some announcing lay-offs or scaling back operations.

Thanh Cong Group, which supplies major clothing brands such as Adidas and Lacoste, told AFP its shipments to the United States had dipped last year, although it would not say by how much.

But producers of electronics, a sector in which foreign multinationals such as Samsung and Apple dominate the market, have seen a surge in US shipments, according to Liu and other analysts.

Seafood and agricultural suppliers also saw modest export growth despite tariff uncertainty, according to official figures.

Coffee sellers Eatu Cafe told AFP they had seen a surge in US orders.

"There was a brief period of hesitation when Trump announced the 20 percent tariff," said the company's director Tran Dinh Trong.

But US orders soon picked back up, he said, adding "our cooperative is optimistic and seeing positive signs to export to the US".

- 'Transshipment?' -

Vietnam emerged as a major winner from Trump's first trade war in 2018, receiving a flood of investment from Chinese manufacturers seeking to avoid US tariffs.

But the widening trade surplus with Washington put Hanoi in Trump's crosshairs when he reentered the White House in 2025.

His "Liberation Day" announcement of 46 percent tariffs on Vietnamese imports shocked the country in April, even though they were later negotiated down to 20 percent for most goods.

The Trump administration has said products illegally transshipped from China via a third country will face a 40 percent levy, although it has yet to define transshipment and negotiations on a final US-Vietnam trade deal are ongoing.

Linh Nguyen, a Vietnam analyst at the consultancy Control Risks, said the surge in Vietnamese exports to the United States partly reflects increased final-stage assembly in Vietnam and its re-export of items produced elsewhere.

"The data shows where shipments are leaving from, not necessarily where the value is being added," she said.

Many US buyers also likely moved their orders forward due to tariff uncertainty, artificially inflating the 2025 numbers, she added.

Even so, HSBC's Liu expects demand for electronics, among other products -- partly driven by the boom in artificial intelligence -- to sustain Vietnam's exports this year.

HSBC predicts the country's trade-driven economy will expand nearly seven percent in 2026, while Hanoi is aiming for at least 10 percent growth.

I.Widmer--NZN