Vietnam ranked third in 2025, behind China ($202 billion) and Mexico ($197 billion), however is now on observe to grow to be the most important exporter to the US by that measure.
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Vietnam is a rustic of round 100 million individuals, in contrast with China’s inhabitants, which is about 14 instances bigger, and an financial system roughly 40 instances the dimensions of Vietnam’s, at near $20 trillion versus $500 billion. American imports from Vietnam rose 40% from a 12 months earlier, whereas imports from China fell from $168 billion to $129 billion over the identical interval.
Coverage shifts hint again to the Nineteen Eighties
Commerce specialists attributed Vietnam’s commerce development to decades-old financial reforms quite than current tariff measures. Hanoi launched its Doi Moi reforms within the Nineteen Eighties, shifting away from centrally deliberate financial coverage and opening as much as international commerce. The US lifted its commerce embargo on Vietnam in 1994 and normalised diplomatic relations in 1995.
A bilateral commerce settlement that took impact in 2001 additional expanded industrial ties between the 2 nations. Citing State Division figures, two-way commerce rose from $451 million in 1995 to almost $124 billion by 2023.Vietnam made export-oriented manufacturing a central a part of its financial technique, becoming a member of regional commerce preparations, attracting international funding, and constructing industrial parks and port infrastructure. Citing World Financial institution knowledge, Vietnam’s trade-to-GDP ratio is now near 170%, among the many highest of any financial system globally.
“China plus one” shift benefited Vietnam
A number of multinational corporations adopted a “China plus one” sourcing technique as Chinese language wages rose and US-China trade relations turned extra strained. Vietnam turned a key beneficiary of this shift, owing to its proximity to China’s manufacturing base, its integration into Asian provide chains, and its price competitiveness.
Firms together with Samsung, Intel and Foxconn have expanded operations in Vietnam, adopted by Apple, Nike and Lululemon. Citing the Wall Road Journal, round 60% of Vietnamese exports to the US now include equipment, electronics or home equipment. Miami-based TOV Furnishings shifted its sourcing combine from 60% China and 25% Vietnam in 2024 to 25% China and 60% Vietnam at the moment, a change the corporate attributed to tariffs.
As of June 2026, China’s efficient US tariff fee stood at 23.2%, in contrast with 6.5% for Vietnam.
Comparability with India
The report, in response to TOI, additionally in contrast Vietnam’s export efficiency with India’s, stating that India’s inhabitants is roughly 14 instances that of Vietnam, whereas its items commerce surplus with the US stood at $58.4 billion, decrease than Vietnam’s regardless of the inhabitants distinction.
India and Vietnam have completely different financial constructions, with India’s massive home market and companies sector that means that goods-trade figures don’t seize the complete scope of its US financial relationship. Even so, Vietnam has been extra profitable at changing international funding and labour prices into export-oriented manufacturing tied to US provide chains.
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India has seen development in electronics exports, together with a pointy rise in mobile-phone exports, however has traditionally had decrease participation in international manufacturing provide chains. Citing World Financial institution knowledge, India’s labour-force participation fee is 56.4%, in contrast with 73% in Vietnam, with 45% of Indian employment nonetheless in agriculture. In Vietnam, agriculture’s share of employment fell from 65% in 2000 to 25% in 2025, in response to the identical knowledge. The World Financial institution was cited as figuring out infrastructure, labour-market regulation, compliance necessities and deeper integration into international worth chains as areas needing enchancment in India.
Vietnam’s trajectory, from a rustic beforehand in battle with the US to one in all its largest buying and selling companions, displays a broader shift in international manufacturing and commerce patterns following modifications in US tariff coverage.
(With inputs from Chidanand Rajghatta’s TOI report)
