Opportunity to restructure FDI

US President Donald Trump has announced a new tariff framework, dubbed “Liberation Day.” Under this plan, most countries will face a minimum tariff of 10% starting April 5, potentially rising to 30–40% depending on bilateral relations. Notably, tariffs on goods from Viet Nam could reach up to 46%, according to the White House.

Cautious sentiment

This move has sparked concern among international investors, especially companies with production and supply chains located in Viet Nam. They now face challenges related to costs, policy risks, and market disruptions. Some FDI enterprises in southern industrial zones have begun adjusting their orders to avoid arising losses, while several domestic firms appear confused due to deep dependence on foreign supply chains.

A turning point came on April 9 when President Trump unexpectedly announced a 90-day delay in imposing tariffs on more than 75 countries that do not retaliate against the US—including Viet Nam, the European Union, South Africa, and many others.

John Rockhold, President of the Pacific Rim Investment and Management (PRIM) and a board member of AmCham Ha Noi, highly appreciated the tariff delay. “Viet Nam has a chance to prove itself a strategic partner—not just in the region, but with the US itself,” he said. According to Rockhold, both AmCham and the Viet Nam Chamber of Commerce and Industry (VCCI) had sent letters to the US President urging a delay, and the resulting decision is an opportunity Viet Nam must not squander.

The foreign business community in Viet Nam, particularly export manufacturers, is closely monitoring every development. “It is still too early to fully measure the tax’s impact, especially since the policy remains unsettled. It is crucial to prepare contingency plans, not just at the sector level, but at the national level,” said Thibaut Giroux, President of the CCIFV (Chambre de Commerce & d'Industrie France-Viet Nam), representing EuroCham.

With global trade becoming increasingly unpredictable, investor sentiment is leaning toward a wait-and-see approach. According to Nguyen Ba Hung, Chief Economist at ADB Viet Nam, foreign investors are holding off on new decisions. “They need more time to understand specific tax rates and implementation timelines, especially those used to making long-term investments,” Hung noted.

He further explained that this cautious attitude is inevitable, as tariff measures do not just affect exporters to the US but also raise trade costs and impact new capital inflows into Viet Nam in the medium term. Companies considering expansion in Viet Nam now have to re-calculate logistics, insurance, and policy risk costs, potentially causing Viet Nam to lose its competitive edge against regional peers like Indonesia and Malaysia.

Turning risk into opportunity

Still, every crisis offers a chance to reshape strategy. Instead of trying to dodge the blow, now might be the right time for Viet Nam to proactively restructure its approach to FDI, shifting from quantity to quality, from labour-intensive to technology-driven investment.

Nguyen Ba Hung emphasised that tax policies are not the sole reason investors relocate. “They will continue to choose Viet Nam if the investment environment improves, infrastructure continues to develop, and international commitments—such as EVFTA and CPTPP—are effectively implemented,” he said.

Furthermore, new-generation free trade agreements (FTAs) will provide Viet Nam a strong buffer against trade tensions. Deep commitments on tariffs, market access, and intellectual property protection in these FTAs will be decisive in keeping long-term investors in the country.

Domestic experts also agree that Viet Nam should use this volatile period to carefully select its FDI partners. Prof. Dr. To Trung Thanh of the National Economics University stated, “Now is the time to decisively abandon the mindset of attracting FDI with cheap labour and tax incentives. Instead, we should focus on enterprises with core technologies, high value chains, and long-term strategies.” He highlighted that while many countries are fiercely competing to retain investment flows, Viet Nam holds advantages in geography, a near-100 million population, and political stability—assets not every country possesses.

John Rockhold reaffirmed that he has not seen no signs that US companies are planning to pull out of Viet Nam. He believes Viet Nam’s market remains highly attractive, especially as the middle class expands and consumer demand grows, creating opportunities across sectors, from agriculture, pharmaceuticals, and machinery to energy and medical devices.

However, Rockhold warned of a potential risk involving product origin. “Viet Nam must clearly demonstrate its commitment not to become a transshipment hub for third-country goods. If origin fraud occurs, it could damage national credibility and have long-term consequences for the entire export sector,” he said.

Another key trend is the rise of automation and artificial intelligence (AI), which is reshaping global production chains. Within 10 years, industries that once relied on cheap labour, like textiles and footwear, will change. It will no longer be a race for labour, but a competition for where energy is more stable and cheaper, Rockhold explained.

If Viet Nam invests correctly in energy infrastructure, AI technology, and logistics, it could become not only a current FDI hub but also a key player in the future supply chain. Policymakers should take note to develop a long-term, sustainable FDI strategy.

According to Rockhold, the 90-day tariff delay is a gift of diplomacy, but it only truly matters if it is used as a push for reform.

Another point that must be addressed is the role of domestic enterprises. Over the past three decades of FDI attraction, local firms have yet to master technology or effectively link with foreign-invested sectors. This is a weakness Viet Nam must overcome if the country seeks to restructure FDI in a sustainable way that also delivers broader economic benefits.

Experts believe Viet Nam needs a clear, consistent, long-term strategy to fully capitalise on shifting investment flows. Relying solely on tax incentives or cheap land rentals is no longer sufficient. Instead, Viet Nam must create a transparent and synchronised investment ecosystem, ranging from legal institutions and logistics to high-quality human resources.

Especially amid the fragmentation of global supply chains, Viet Nam has an opportunity to become a new production and transit hub in Southeast Asia. However, to achieve this, Viet Nam must move beyond short-term, incentive-driven FDI and instead pursue value-added, future-oriented capital flows.

Additionally, local administrations must play a greater role in administrative reform, land clearance, and business support. In reality, many provinces and cities have attracted quality FDI thanks to proactive, transparent, and decisive leadership. Grassroots-level dynamism will be a key competitive advantage in the eyes of international investors.

As global uncertainties grow more complex, it is no longer enough to simply adapt, Viet Nam must lead. The country now faces a major test but also a golden opportunity to redefine its place on the global FDI map.

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