Prime Minister Pham Minh Chinh stated that Hanoi is pursuing trade deals aimed at cushioning the economy from tariff pressures imposed by its largest export market. The announcement follows estimates by the United Nations Development Programme (UNDP), which warned that US duties could reduce Vietnam’s exports to the US by as much as 20 per cent, making it the most affected country in Southeast Asia.

Vietnam expanded its export footprint from 104 countries in 2024 to 132 in 2025, even as plans are underway to pursue FTAs with new partners to cushion the impact of tariffs.
According to UNDP estimates, US duties could slash Vietnam’s exports to the US by up to 20 per cent, making it the most heavily impacted country in Southeast Asia from US tariff measures.

The US has imposed tariffs of 20 per cent on most Vietnamese goods and up to 40 per cent on items transhipped via Vietnam.

In response, Hanoi is reportedly targeting the conclusion of free trade agreements with Latin America’s Mercosur bloc and the Gulf Cooperation Council (GCC) by the end of 2025.

These moves are seen as a strategic attempt to both offset the immediate fallout from US trade actions and broaden Vietnam’s global footprint.

While FTAs are a key pillar of the response strategy, experts underline the importance of market diversification to hedge against rising geopolitical and policy risks and Vietnam’s textile and apparel sector—a core component of its export economy—has already taken steps in this direction.

According to the Vietnam Textile and Apparel Association (VITAS), the industry has expanded its export reach from 104 destinations in 2024 to 132 in 2025.

Vietnamese firms are now delivering high-quality garments to markets such as China, Russia, the Commonwealth of Independent States (CIS), and across ASEAN.

In tandem with geographic diversification, to comply with increasingly stringent standards in key export markets, Vietnamese garment manufacturers are also accelerating shifts toward green production and sustainable development. Firms are investing in advanced machinery, upgrading workforce capabilities, and moving away from traditional cut-make-trim (CMT) models to higher-value production formats such as free-on-board (FOB), original design manufacturing (ODM), and original brand manufacturing (OBM).

So, despite headwinds on account of US tariffs and global trade volatility, industry stakeholders remain optimistic about the sector’s growth potential as companies actively expand into new markets to drive exports and hedge against geopolitical risks.

Fibre2Fashion News Desk (DR)