Vietnam economy: Soars to 7.52% growth in first half of 2025; exports boom despite Trump tariff deal

Vietnam’s economy grew 7.52 per cent in the first half of 2025, its highest pace in over a decade, on the back of strong exports and despite global uncertainties, the General Statistics Office (GSO) announced on Saturday. This comes just days after Hanoi secured relief from the steepest tariffs threatened by US President Donald Trump.According to GSO, the GDP expansion between January and June marked the fastest first-half growth since 2011, with the second quarter alone growing 7.96 per cent year-on-year. "Our country's socio-economic performance... achieved very positive results, approaching the set target in the context of many uncertainties in the world and regional economy," the GSO said in its statement, as per news agency AFP.Vietnam, a key global manufacturing hub, had reported 7.1 per cent growth in 2024 and is targeting an ambitious 8 per cent in 2025. The new figures put the country well on track, driven largely by soaring exports, which reached $219.83 billion in the first half, a 14.4 per cent year-on-year rise. Processed industrial goods made up nearly 90 per cent of this total.This export momentum gained further significance after Hanoi reached a trade deal with Washington that capped most tariffs at 20 per cent, avoiding the earlier threatened rate of 46 per cent. The deal also opened Vietnam’s market to US goods at zero tariffs. However, a 40 per cent tariff remains in place for "transshipped" goods, those moving through Vietnam to evade origin-country tariffs, a move aimed largely at Chinese products, as per the New York Times.Vietnam is the US’s largest export partner in Southeast Asia, with shipments to America valued at $70.91 billion in the first half alone, according to GSO data. The US is also Vietnam’s biggest trade partner after China and Mexico.While the new tariffs are significantly lower than what Trump had originally proposed, they are still five times higher than previous levels, as per Bloomberg. Uncertainty remains over how these tariffs will impact supply chains, especially given Vietnam’s heavy reliance on Chinese inputs for manufacturing."With the new 20 per cent tariff, we think the government will speed up industrial upgrading and shift exports from low-margin goods to higher value-added products such as semiconductors," Fitch Solutions said in a note, highlighting upside risks to its 2025 GDP forecast of 6.4 per cent, according to news agency Reuters.Investment firm Dragon Capital’s founder Dominic Scriven also described the trade deal as “net-positive,” stating that fears of a more damaging blow had been avoided. “With external trade risk now moderating, attention can return to the country’s core growth engine, the domestic and private sector economy,” he said.Vietnam’s industrial production grew 10.3 per cent during the April-June quarter, and consumer inflation in June stood at 3.57 per cent, according to official data.The country's efforts to reorganise its administrative setup by merging several provinces and cities last month were also cited by GSO as part of broader socio-economic development plans.Still, concerns persist over the longer-term implications of the new US trade terms. As per the New York Times, ambiguities remain over which Vietnamese products will be considered transshipped or excessively reliant on Chinese inputs, potentially subjecting them to the harsher 40 per cent levy.Trump, in his announcement, characterised the new pact as a “Great Deal of Cooperation,” though critics argued the tariffs, ultimately paid by US importers, would still impose a burden on American businesses and consumers.