HANOI, July 6 — Vietnam's economy grew at a faster pace in the second quarter of this year led by strong exports, in an encouraging sign just days after United States (US) President Donald Trump said he would place lower-than-threatened 20 per cent tariffs on many Vietnamese products.
Concerns over the Southeast Asian manufacturing hub's outlook had been growing in the run-up to the trade deal announced on Wednesday, particularly as the US is Vietnam's biggest export market.
Gross domestic product growth in the April-June quarter accelerated to 7.96 per cent year-on-year, from the 6.93 per cent in the first quarter, government data showed.
It was just short of Hanoi's full-year growth target of at least eight per cent.
"Economic performance in the first half of this year was positive and close to our target amid global and regional economic uncertainties," Vietnam's National Statistics Office said yesterday.
Exports were a bright spot in the last quarter, rising 18.0 per cent to US$116.93 billion (RM493.5 billion) from a year earlier, while imports were up 18.8 per cent at US$112.52 billion (RM474.9 billion), translating into a trade surplus of US$4.41 billion (RM18.61 billion), the NSO data showed.
Industrial production in the period rose 10.3 per cent, while June consumer prices rose 3.57 per cent.
On Wednesday, Trump announced that the US and Vietnam reached a trade deal, under which Vietnamese goods would face a 20 per cent tariff, with trans-shipments from third countries through Vietnam also facing a 40 per cent levy. Vietnam could import US products with a zero per cent tariff.
The tariff rates were lower than the initial 46 per cent rate threatened by Trump in April.
Vietnam hailed the deal as a boost for business and said negotiators were working to finalise details, as business groups awaited clarity on the finer points to assess the impact of the new tariffs.
The US is Vietnam's largest export market, a regional manufacturing hub that houses several multinational companies, including Samsung Electronics and Foxconn. It recorded a trade deficit of US$123 billion (RM519.1 billion) with Vietnam last year, one of its highest globally.
Vietnam is also home to several Chinese companies, which analysts said are likely the main targets for the 40 per cent tariff on trans-shipments. China is Vietnam's largest two-way trading partner, on which it relies heavily for components and materials for its manufacturing industries.
Fitch Solutions said that Vietnam's exports and investment will remain strong for the remainder of the year, signalling upside risks for its 2025 GDP growth forecast of 6.4 per cent.
"With the new 20 per cent tariff, we think the government will speed up industrial upgrading and shift exports from low-margin goods to higher value-added products such as semiconductors," it said in a note on Friday.
Investment firm Dragon Capital's founder and chairman Dominic Scriven said the trade deal is "net-positive" and the potential GDP hit is less severe than feared.
"With external trade risk now moderating, attention can return to the country's core growth engine, the domestic and private sector economy," he said.
— Reuters
