Understanding Trump’s New Tariffs and Their Impact on Vietnam and other Asian Supply Chains

On April 2, 2025, former U.S. President Donald Trump announced a bold new set of tariffs under the banner of a “Declaration of Economic Independence.” This move marks a significant shift towards protectionism, aiming to protect American industries from what Trump calls unfair foreign competition. At the center of the strategy are broad-based tariffs combined with targeted country-specific duties.

Asia in the Spotlight: Countries Most Affected by the New Tariffs

While the universal baseline tariff applies a 10% duty on nearly all imported goods into the US, several Asian countries face much harsher penalties. The tariffs seem to target countries that supply large volumes of affordable consumer goods and industrial components to the U.S.

Here are some of the most impacted Asian sourcing countries:

This list shows how Southeast Asian nations — many of which have been promoted as alternatives to China under the “China Plus One” strategy — are now directly targeted. Vietnam, in particular, faces some of the highest reciprocal tariffs, almost doubling import costs for US buyers.

>> Related article: Vietnam vs China for Sourcing : Is Vietnam a Strategic Alternative to “Made in China” ?

Key Impacts on Businesses: Costs, Supply Chains, and Inflation

The most immediate effect is on import costs, which will inevitably be passed along the supply chain. For sectors like furniture, apparel, electronics, and automotive components — where Vietnam, Thailand, and Malaysia are major players — the impact will be especially severe.

• Increased Prices: Electronics, textiles, and machinery from Asia will be more expensive for U.S. businesses and consumers.
• Supply Chain Reassessments: Many companies who shifted part of their sourcing to Vietnam or Southeast Asia to diversify away from China will now need to reconsider.
• Inflation Pressure: Higher import costs could push up consumer prices, contributing to inflation concerns in the U.S. market.
• Uncertainty: Businesses must anticipate potential retaliatory tariffs and disruptions in global trade agreements.

>> Related article: Impact of Trump 2.0 and Supply Chain Diversification

Strategies for Sourcing Amid New Tariffs: Diversify, Localize, or Optimize?

For companies sourcing from Asia, especially small and medium enterprises (SMEs), this situation creates both risks and opportunities. Here are some actionable strategies:

• Supplier Diversification: Countries like the Philippines, India, or Bangladesh may still offer competitive advantages depending on specific products.
• Partial Reshoring: Some companies may consider moving part of their production back to the U.S. to avoid tariffs entirely, particularly for higher-margin or specialized products.
• Optimize Supply Chains: Reviewing and renegotiating contracts, optimizing logistics, or shifting to countries with lower tariffs could minimize the impact.
• Explore Non-Tariffed Countries: Some Asian countries (like Singapore or Pakistan) face lower or no additional tariffs under the current framework.

Vietnam and Southeast Asia: Still Relevant or Too Costly?

Vietnam has long been a prime sourcing destination for industries seeking quality manufacturing at competitive costs. However, with the new 46% reciprocal tariff, businesses sourcing from Vietnam must carefully analyze if they can absorb, pass on, or circumvent these additional costs.

Still, Vietnam and its neighbors offer:

1. Strong manufacturing ecosystems;
2. Skilled labor forces;
3. Growing capacity and infrastructure;

>> Related article: Top Made in Vietnam Products for 2025 : Sourcing and Manufacturing

In the long term, businesses might find that Vietnam’s non-price advantages (speed, reliability, specialization) still justify the higher costs for certain products. However, they will likely combine Vietnam with other sourcing hubs in the region to reduce risk.

Trump’s tariffs are set to reshape global trade — but they don’t necessarily close the door on sourcing from Asia. Rather, they push companies to make smarter, more resilient supply chain decisions. For many businesses, balancing between tariffed and non-tariffed sourcing countries will be the new normal.

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Source: Vietnam Insider