Advisor outlines three strategies for Vietnamese firms facing US tariffs

Vietnamese companies must upgrade their value chains, shift decisively from original equipment manufacturing (OEM) to original brand manufacturing (OBM), and invest in brand development to combat the threats posed by U.S. tariffs.

Son Tran, assistant professor of business at SUNY Cobleskill and business development advisor to the US-Vietnam Business Council, made the remark on Friday at the workshop titled “U.S. reciprocal tariffs: Preparing Vietnamese enterprises”.

He noted that U.S. trade policy has evolved from a focus on free trade to a more strategic trade approach, prioritizing industrial policy and national security. This shift presents both challenges and opportunities.

While Vietnam remains a key player in the "China +1" strategy, it faces increased scrutiny from the U.S. regarding issues such as transshipment, anti-dumping measures, labor practices, labeling, and rules of origin.

“Tariffs from the U.S. are unlikely to disappear anytime soon. Vietnam needs a proactive, strategic response. Agility, trust, and innovation will be the cornerstones of success,” Son stated.

To effectively adapt, he outlined three strategic directions for Vietnamese businesses. Firstly, Vietnamese companies should strictly comply with regulations, including strengthening supply chain documents, ensuring transparent labeling of origin, and early application of U.S. and EU standards.

Secondly, they should upgrade the value chain, strongly transform from the original equipment manufacturing (OEM) model to the original brand manufacturing (OBM) model, invest in branding and innovation, and own a customer base.

Thirdly, Vietnamese businesses need to increase participation, proactively work with trade associations and policymakers, participate in policy discussions, and demonstrate that Vietnam is a reliable partner.

Cao Thi Phi Van, deputy director of the Investment of the Trade Promotion Centre of Ho Chi Minh City (ITPC), emphasized that the U.S. remains Vietnam’s largest export market.

Over the past five years, Vietnam has consistently maintained a significant trade surplus with the U.S., increasing from approximately $63.4 billion in 2020 to nearly $106 billion in 2024.

However, like many countries, the Southeast Asian country is now subject to U.S. reciprocal tariff measures. In light of these challenges, businesses must reevaluate their strategies, drive innovation, and enhance operational capabilities to remain competitive.

“The HCMC government and business community are committed to strategic initiatives aimed at diversifying markets, products, and supply chains; improving the quality and competitiveness of goods and services; and being prepared for shifts in the global economy,” said Van.

She also noted that leveraging the benefits of 17 active free trade agreements (FTAs) could serve as a launchpad for expanding market reach and strengthening global integration.

Joe Trung Trinh, executive director of the US-Vietnam Business Council, said that in every challenge lies opportunity. Regardless of how high U.S. tariffs may go, Vietnamese businesses still have the potential to thrive in the American market. What matters most is how they choose to respond.