Vietnam is facing steep export losses following US tariffs imposed in August, Reuters reports.
According to estimates from the United Nations Development Programme (UNDP), those tariffs could cut up to 19.2% of Vietnam’s exports to the United States, or about $25 billion, making Vietnam the worst-hit country in Southeast Asia.
Last year, Vietnam shipped around $136.5bn in goods to the US, much of which was produced by factories operated by the US and other foreign multinationals or their suppliers.
Early trade data already points to a decline: exports from Vietnam to the US fell by about 2% in August relative to July, and footwear exports dropped 5.5%.
The projections represent a worst-case scenario in which the new US duties are fully passed on, demand is dampened, and alternative markets do not compensate. Some mitigation is possible via exemptions (for example, in consumer electronics), cost absorption by exporters, or diversion to other markets.
Vietnam stands out among its Southeast Asian neighbours in exposure. The UNDP report estimates an average drop of about 9.7% in exports to the US for the region as a whole.
Other large Southeast Asian economies are also expected to face losses, but markedly smaller than Vietnam’s. Thailand’s exports to the US could fall by 12.7%, Malaysia's by 10.4%, and Indonesia's by 6.4% under similarly adverse scenarios.
Malaysia is somewhat less exposed than Vietnam, though still vulnerable.
About 55% of its exports to the US are said to be subject to the full duty regime, giving it a trade-weighted average tariff burden of about 14% under present policies. Many of Malaysia’s US exports are electronics (including semiconductors), a sector that currently benefits from some carve-outs, which soften the immediate impact.
These losses are not just statistical. They imply potential knock-on effects for GDP, employment in export-oriented sectors, and investment. For Vietnam especially, a drop in US demand threatens factories, supply chains, and jobs in footwear, textiles and other labour-intensive industries. Regional peers may also be forced to adjust, either by absorbing costs, finding new markets, or diversifying product lines.
In sum, while many Southeast Asian economies will feel pain from the US tariff regime, Vietnam is expected to bear the greatest relative loss. Malaysia, Thailand and Indonesia are in intermediate positions – exposed, but with somewhat lower projected declines.
