Vietnam's Economy Soars 7.52% in H1 2025 Amid U.S. Trade Relief and Export Boom

Vietnam's Economy Soars 7.52% in H1 2025 Amid U.S. Trade Relief and Export Boom

Last Updated Jul - 05 - 2025, 06:34 PM | Source : Fela News

Vietnam records its fastest first-half growth since 2011 at 7.52%, driven by strong exports and a new U.S. trade deal. Experts cite industrial gains and tariff

Vietnam’s economy surged by 7.52% in the first half of 2025—its fastest growth rate in over a decade—driven by robust export performance despite global economic uncertainties, the General Statistics Office (GSO) announced on Saturday.

The announcement comes shortly after Vietnam secured a favorable trade agreement with the U.S., helping the country avoid the steepest tariffs threatened by President Donald Trump. According to GSO, Vietnam’s GDP growth from January to June marks the strongest first-half expansion since 2011, with the April–June quarter alone recording an impressive 7.96% year-on-year increase.

“Our nation’s socio-economic development achieved very positive results, nearing set targets amid global and regional challenges,” the GSO said, as quoted by AFP.

A key global manufacturing base, Vietnam posted 7.1% GDP growth in 2024 and has set its sights on an ambitious 8% for 2025. With exports surging to $219.83 billion in the first half of the year—a 14.4% increase year-on-year—the country appears firmly on track. Nearly 90% of this export volume came from processed industrial products.

The strong export figures were further boosted by Hanoi’s recent trade deal with Washington, which capped most U.S. tariffs at 20%—significantly lower than the previously threatened 46%. The agreement also granted duty-free access to U.S. goods entering Vietnam. However, a 40% tariff remains for “transshipped” products—goods rerouted through Vietnam to bypass origin-country tariffs, primarily targeting Chinese exports, according to the New York Times.

The United States remains Vietnam’s top export destination in Southeast Asia, with goods valued at $70.91 billion shipped in the first half of 2025. Overall, the U.S. ranks as Vietnam’s biggest trading partner after China and Mexico.

While the revised tariffs are far lower than initially proposed, they are still five times higher than previous levels, Bloomberg reported. Analysts warn of potential disruptions to supply chains, particularly given Vietnam’s heavy dependence on Chinese components for manufacturing.

Fitch Solutions noted in a report that the 20% tariff could push Vietnam to accelerate its industrial upgrades and shift its export base toward higher-value products such as semiconductors. This outlook prompted the firm to flag upside risks to its current 2025 GDP forecast of 6.4%, according to Reuters.

Dominic Scriven, founder of investment firm Dragon Capital, called the deal a “net-positive” for Vietnam, noting that it avoided harsher trade fallout. “With external trade risks now easing, the focus can shift back to domestic and private sector-driven growth,” he said.

Vietnam’s industrial output rose 10.3% in the second quarter, while inflation in June stood at 3.57%, according to official figures. The GSO also pointed to recent administrative restructuring—such as the merging of certain provinces and cities—as part of broader reforms to support sustainable economic growth.

Despite the strong momentum, uncertainties remain over the long-term implications of the U.S. trade agreement. Questions persist about which Vietnamese exports could be classified as transshipped or overly reliant on Chinese inputs, making them subject to the 40% tariff.

President Trump hailed the new agreement as a “Great Deal of Cooperation,” though critics argue that the elevated tariffs will ultimately burden U.S. importers and consumers.

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