US tax policy also presents great opportunities: SSI economist

While U.S. tax policy could strongly impact Vietnam, it also presents great opportunities, said Pham Luu Hung, chief economist at leading Vietnamese broker SSI Securities.

"A recent survey by Jetro shows that many Japanese companies are moving out of China, with around 200 of them relocating to Vietnam. This highlights Vietnam's significant potential for attracting investment," Hung told the "Gateway to Vietnam" online dialogue held by SSI on Thursday, which focused on "U.S. President Donald Trump’s tax policy."

"Vietnam cannot isolate from major economies and must actively participate in global competition. Currently, the country is in a favorable position, with growing international connectivity and strengthened cooperation with key countries, particularly the United States," he added.

Regarding the target of double-digit GDP growth, Hung emphasized that Vietnam needs to make substantial efforts.

While the country is currently in its "golden population" period, this opportunity is limited, with only about 15 years left. The government is focused on accelerating the progress, which is why reforms began last year. Streamlining and improving the efficiency of the state apparatus can play a key role in making this progress faster, he remarked.

Looking ahead, Hung forecasted that Vietnam’s primary growth driver in 2025 would likely come from public investment, especially in infrastructure. Sectors like construction and building materials are expected to perform well this year.

The SSI executive also pointed to domestic consumption as a growth factor. If the middle class becomes more affluent, combined with the country’s status as an Asian market, real estate could become a key industry.

"Should real estate continues its upward trajectory, it could help stimulate consumption and further drive economic growth. The real estate sector remains intriguing, even though some prominent names might discourage foreign investors. Mid-range developers are still worth considering," Hung commented.

Looking forward, not only are numerous land-related laws about to be implemented, but the government is also taking a more proactive approach in streamlining licensing approvals to boost market supply.

Regarding Trump’s tariff policies, there is potential for more manufacturing to shift to Vietnam, which would be beneficial for industrial parks. Currently, some promising deals are emerging, he added.

In the dialogue, Frank Kelly, founder and managing partner of Fulcrum Macro Advisors LLC, noted that Vietnam’s exports to the U.S. were estimated to reach nearly $120 billion in 2024, while Vietnam imported more than $15 billion, creating a noticeable trade deficit.

However, there has been no clear direction from the Trump administration regarding Vietnam, especially in terms of specific policies and actions, he added.

Looking ahead, Vietnam may become a key player in the U.S. trade strategy. Trump’s actions reflect his goal of addressing the trade imbalance, not just between the US and Vietnam, but also with other countries, including China, according to Kelly.

The Trump administration is particularly focused on Chinese exports routed through Vietnam to the U.S. There have been numerous reports of investors and factories flooding into Vietnam, but the Trump administration does not want this trend to continue, he said.

Previously, at the workshop "New U.S. policy: Impacts on trade and investment," held in HCMC on January 8, Bob Bauer, president of the US Association of Food Industries, highlighted the need for Vietnam to adapt to new policies and intensified international competition.

He emphasized the importance of managing costs, ensuring food safety, and improving food quality for the U.S. market.

"Trump is expected to impose stricter limitations on imports from China, creating more opportunities for Vietnam. Vietnam has an advantage in exporting food to the U.S. and Vietnamese food is easier to export to the U.S. than from China," Bauer said.

He also noted that many U.S. businesses believe Vietnam imports raw materials from other countries for processing and export to the U.S. "Vietnam must strengthen efforts to verify and affirm the origin of its materials."