Vietnam Economic News: 5.4 – 12.4.2025
Summary of Vietnam Economic News: 5.4 - 12.4.2025
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Summary of Vietnam Economic News: 5.4 - 12.4.2025 ---
What Samsung and Vietnam stand to lose in Trump’s tariff war
Reuters News – 13 April 2025
When Samsung Electronics chairman Jay Y. Lee met Vietnam's prime minister in July, he had a simple message to convey. "Vietnam's success is Samsung's success, and Vietnam's development is Samsung's development," Lee told Pham Minh Chinh, pledging long-term investment to make the country its biggest manufacturing base for display products. Since the South Korean conglomerate entered Vietnam in 1989, it has poured billions of dollars into expanding its global manufacturing footprint beyond China. Many of its peers followed after U.S. President Donald Trump placed tariffs on Chinese goods in his first term. The pioneering move has made Samsung Vietnam's biggest foreign investor and exporter. About 60% of the 220 million phones Samsung sells each year globally are made in Vietnam, and many are destined for the U.S., where Samsung is the No. 2 smartphone vendor, according to research firm Counterpoint. Now, that reliance on Vietnam threatens to backfire as Hanoi is racing to negotiate with the Trump administration to lower a punishing potential 46% tariff that has exposed the vulnerability of the country's export model. "Vietnam is where we produce most of our smartphones, but the tariffs (initially) came out much higher than expected for the country, so there's a sense of confusion internally," said a Samsung executive. Even if the two countries reach an agreement, Vietnam's roughly $120 billion trade surplus with the U.S. has put it in the sights of a U.S. administration targeting such imbalances. Hanoi hopes to get the duties reduced to a range of 22% to 28%, if not lower. Amid the uncertainty, Samsung and its suppliers are considering adjusting production. That could involve increasing output in India or South Korea, though such steps would be costly and time-consuming. Samsung has said previously it would respond flexibly to U.S. tariffs with its global supply chain and manufacturing footprints. Samsung's rival Apple faces an even bigger challenge at least in the short term, as Trump's tariffs on Chinese imports have increased to 145%. Apple imports around 80% of iPhones sold in the U.S. from China, according to Counterpoint.
Facing Trump tariffs, Vietnam eyes crackdown on some China trade
Reuters News – 11 April 2025
In hope of avoiding punishing U.S. tariffs, Vietnam is prepared to crack down on Chinese goods being shipped to the United States via its territory and will tighten controls on sensitive exports to China. The offer came as senior U.S. officials, including the influential White House trade advisor Peter Navarro, raised concerns about Chinese goods being sent to America with "Made in Vietnam" labels that draw lower duties. Vietnam has for weeks been offering sweeteners that it hoped would persuade the U.S. President Donald Trump's administration to take a benign view of its huge trade surplus with America. Instead, it was hit with a 46% tariff as part of Trump's "Liberation Day" salvo. While the tariff has been suspended for 90 days, the two countries agreed to start talks after a Vietnamese deputy prime minister met with the U.S. Trade Representative on Wednesday. Export-reliant Vietnam is hoping to get the duties reduced to a range of 22% to 28%, if not lower, according to three people with knowledge of the matter. One of them said that U.S. officials had signalled that range was likely, during a bilateral meeting in March. In announcing the start of trade talks with the U.S. on Thursday, Vietnam's government said on its official portal it would crack down on "trade fraud."
Vietnam Airlines signs strategic investment MOU with Citibank, N.A.
Reuters News – 10 April 2025
Vietnam Airlines said on Thursday it has signed a memorandum of understanding with Citibank, N.A. for more than $560 million in funding for strategic investment. The airline said that under the agreement Citibank, N.A. has committed to providing financial support for investment projects which aim to strengthen its operational capacity and expand its international route network. The ceremony was witnessed by Vietnam’s Deputy Prime Minister Ho Duc Phoc, as part of the Vietnamese Government delegation’s official visit to the US. The visit is aimed at strengthening bilateral trade relations and facilitate funding for key investment projects by State-owned enterprises. Under the agreement, Citibank, N.A. has committed to providing financial support for Vietnam Airlines’ investment projects aimed at strengthening the airline’s operational capacity and expanding its international route network in the years ahead. Beyond funding, Citibank will also deliver strategic advisory services to help Vietnam Airlines build a robust financial framework, ensuring efficient investment and effective risk management. Collaborating with leading global financial institutions—especially those based in the US — is a key pillar of Vietnam Airlines’ long-term strategy to enhance competitiveness, modernise its fleet and stay aligned with evolving global aviation trends.
Lego opens new $1 billion Vietnam manufacturing site to support Asia-Pacific growth
Dow Jones Institutional News – 10 April 2025
Lego has opened a new factory in Vietnam as it seeks to support long-term growth in the Asia-Pacific region through increased manufacturing capacity. The company has invested $1 billion in the new plant, which marks its sixth global factory and second in Asia. From early next year, the new factory will run on 100% renewable energy and it will also be its first factory to package its bricks in paper-based bags, rather than the traditional single-use plastic bags. Lego will officially open a regional distribution center in Vietnam later this year as part of its strategy to increase flexibility and agility in its supply chain. The new Vietnam distribution center will be operated by Swiss logistics group Kuehne+Nagel, and it has already started ramping up operations with first inbound and outbound shipments underway.