ADB issues a critical warning for Vietnam in 2025–2026

DNHN - In an era when global trade is caught in a spiral of uncertainty with tariffs reaching their highest levels since the 1930s, supply chains fragmented, and geopolitical risk intensifying.

The Asia Economic Outlook report, published by the Asian Development Bank (ADB) and the Vietnam Research Office (VRM) delivers urgent cautions for 2025–2026

While Vietnam continues to maintain macro stability, low inflation, and steadily growing domestic demand, the new challenge confronting businesses is that they can no longer rely solely on the comparative advantage of “low‑cost exporting.”

From an expert standpoint (as presented by Doanh nghiệp & Hội nhập magazine), this article examines five strategic areas: the global landscape and a new era of tariffs; Vietnam’s macro foundations and bright spots; growth and inflation prospects for 2025–2026; real impacts on sectors and enterprises; and the critical strategies and proposals for Vietnamese businesses to navigate one of the most turbulent periods in global trade since the 2008 financial crisis.

The global landscape in a high-tariff era

The international trade environment in 2025 evokes the darker days of the 1930s: average U.S. tariffs have reached record highs not seen in nearly a century. This has triggered a “rush to export before tariffs,” as many conglomerates accelerate shipments ahead of new tariff schedules. Yet this urgency cannot obscure the deeper truth: global transaction costs have been lifted to a permanently higher plateau.

In Asia, historically a locomotive of global trade, this shock is coupled with a weakening in domestic investment and consumption across many major economies. High-tech industries, which thrived under pandemic demand, are now just barely holding on by leveraging windows of opportunity before new tariff regulations take effect.

Vietnamese firms, deeply embedded in regional supply chains, cannot stand apart from these shocks. Three structural risks now shape the business landscape: uncertain trade policy, tightening global capital access, and enduring geopolitical tensions stretching from the Middle East to Eastern Europe.

Vietnam: A strong macro base, but still vulnerable

In the first half of 2025, Vietnam recorded an encouraging economic performance. Exports rebounded, manufacturing and processing regained momentum, and public investment disbursement accelerated. Notably, inflation remained low and the balance of payments stayed in surplus, strengthening investor confidence.

Retail sales continued to climb steadily, becoming a stabilizing force when global trade faced headwinds. Meanwhile, the banking system sustained credit flows into productive sectors, helping maintain the circulation of capital.

Yet analysts caution against complacency. Foreign direct investment—once a long-term engine of growth—is beginning to feel the impact of evolving global supply chain strategies. The shift toward “diversified sourcing” and favoring “friendly partners” is prompting multinational corporations to scrutinize not just cost, but factors such as sustainability (ESG), supply chain security, and technical standards. Vietnam must therefore demonstrate reliability across the value chain, not just maintain the reputation of being a low-wage destination.

Outlook 2025–2026: Growth will not come easily & business realities

Projections for developing Asia peg growth at around 4.8% in 2025, easing to 4.5% in 2026. With its stable macro footing, Vietnam is likely to remain among the faster-growing economies in the region. However, this pace falls short of earlier expectations.

Vietnam’s inflation is forecast to stay below 4%, offering flexibility for fiscal and monetary policy. Still, achieving growth above the regional average will depend heavily on leveraging domestic demand, prioritizing high-quality public investment, and restructuring export competitiveness.

This implies that Vietnamese enterprises cannot simply wait for favorable macro policies; they must actively transform over the next 12–24 months.

Sectoral impacts on enterprises

Manufacturing & processing (electronics, machinery, textiles, wood): These sectors face intensifying scrutiny of origin rules. If domestic content ratios fall short, products may be flagged as “transshipment” and subjected to higher supplemental tariffs, a non-negligible risk in a volatile environment.

Agriculture & food: Profit margins are squeezed by rising logistics and energy costs, while increasingly stringent inspection and traceability demands loom large. SMEs must swiftly upgrade standards to avoid exclusion from global supply chains.

Domestic retail: While the expanding middle class continues to support demand, competition is fiercer. Businesses must streamline their product offerings and invest in omnichannel platforms and direct-to-consumer (D2C) models.

Infrastructure, technology, construction: The boost from public investment creates windows of opportunity but only for firms with strong project management, firm finances, and commitment to ESG norms.

From reactive to strategic: The enterprise imperative

In a notoriously unpredictable trade environment, business leadership cannot rely on reactive maneuvers. Firms must build detailed supply chain maps, identify HS codes, transit hubs, and domestic content ratios. These become strategic tools for risk control and negotiating leverage.

Maximizing benefits from free trade agreements (EVFTA, CPTPP, RCEP) is no longer discretionary; it’s essential. Only enterprises with transparent origin documentation stand to access preferential tariff windows and preserve market share.

Contracts must embed flexibility, allowing price adjustments tied to logistics and tariff shifts. Demand forecasting systems, foreign exchange hedging, long-term logistics contracts, and digital traceability platforms will become indispensable risk management tools.

Strategic sector upgrading over market retention

A consistent message from the regional outlook is clear: Vietnamese firms must move beyond defending market share; they must scale new rungs of value.

In electronics, Vietnam has long served as an assembly hub. To remain resilient, companies must pivot toward higher‑value modules and circuit boards, while forging satellite operations in tariff-friendly regions to diversify risk.

In textiles & footwear, pressure from EU and U.S. markets necessitates investment in regional raw materials, integration of ESG standards, and piloting near-shoring strategies within destination markets.

In wood & furnishings, legality and traceability of timber become not just regulatory hygiene but “passports” to global value chains. Simultaneously, refining design, packaging, and shipping efficiency is a differentiator.

In agriculture & food, stepping out of raw manufacturing status requires full upgrades across HACCP certification, cold chain infrastructure, and branding initiatives in target markets.

Policy alignment & strategic recommendations toward 2026

Vietnam stands at a major crossroads. A growth model reliant on low cost and external demand is reaching its limits. The path forward demands alignment between macro policy and the enterprise-level transformation.

On the policy front, three pillars must be advanced in tandem:

• Digitalization of origin and customs procedures while clarifying rules on transshipment penalties,
• Expanded export credit insurance and FX risk mitigation tools for SMEs,
• Selective public investment, especially in logistics infrastructure, renewable energy, and digital foundations.

Meanwhile, businesses must adopt a forward-looking mindset. Scenario-based operations planning, compliance standardization, scalable traceability, and increased domestic content in key stages must become core capabilities. Strategic alignment with green transitions and galvanizing public investment will unlock new avenues for growth.

At the national level, a robust SME supplier‑development program is essential to build reliable domestic linkages in global value chains. This not only meets the demands of multinational enterprises but also helps Vietnamese firms expand their role from low-cost contractor to globally credible partner.

Vietnam has the potential to lead in Asia’s supply chain landscape, but not by competing on cost alone. To succeed, the country and its businesses must be adaptive, transparent, and standardized at international levels.

Dr. Nguyen Thuy Lan

Vietnamese version: https://doanhnghiephoinhap.vn/adb-canh-bao-quan-trong-cho-viet-nam-giai-doan-2025-2026-117276.html