Vietnam’s Prime Minister Pham Minh Chinh has reaffirmed the country’s economic growth target of at least 8% for 2025, despite global economic pressures and potential tariffs from the US.

Chinh made this statement during a National Assembly session in Hanoi on May 5, 2025.

The Prime Minister acknowledged the challenges posed by recent global economic changes, labeling them as “unprecedented.”

He emphasized the government’s commitment to achieving double-digit economic growth in the coming years.

Vietnamese officials are currently negotiating with the US to avoid a potential 46% tariff on exports.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Vietnam’s export vulnerability reveals risks of trade-dependent growth models

Vietnam’s economic exposure to US tariffs highlights the vulnerability of its export-driven growth strategy, with exports to the US alone representing approximately 30% of its GDP 1.

This dependence on a single market creates significant risk, as evidenced by recent manufacturing contractions shown in the S&P Global manufacturing PMI for Vietnam, which fell to its lowest reading since May 2023 2.

The potential 46% tariff threatened by the Trump administration would severely impact Vietnam’s growth trajectory, potentially derailing its remarkable economic transformation that has seen GDP per capita rise from just US$230 in 1985 to nearly US$4,500 in 2023 3.

Vietnam’s situation reflects a broader development challenge in Southeast Asia—the trade-off between export-led rapid growth and economic security—which previously affected countries like Thailand and Malaysia during earlier trade disputes.

The manufacturing slowdown already occurring before tariffs are even implemented suggests market sensitivity to this vulnerability, demonstrating how trade tensions can impact economic performance even before policy changes take effect.

2️⃣ Economic resilience through diplomatic balancing remains Vietnam’s key strategy

Vietnam’s approach to maintaining its 8% growth target despite US tariff threats reflects its decades-long strategy of diplomatic flexibility to navigate great power competition.

Since implementing market reforms (“Đổi Mới”) in 1986, Vietnam has expanded diplomatic and trade relations from just a handful of countries to nearly 170 nations today, creating a diversified international portfolio that provides economic resilience 4.