Vietnam’s 2026 Outlook, Shifts in Supporting Industries

Entering 2026, Vietnam’s economy is likely to face both opportunities and challenges as the government targets double-digit GDP growth amid U.S. tariff pressures, global trade fluctuations, and significant FDI shifts toward industrial manufacturing sectors. To provide further insight, we interviewed economic expert Nguyen Xuan Thanh from the Fulbright School of Public Policy and Management, Fulbright University Vietnam, drawing on updated analyses to clarify the economic outlook and its impact on the supporting industry.

How is Vietnam’s macroeconomic outlook for 2026, given the government’s ambitious growth target?

The government’s GDP growth target of over 10% reflects expectations for a strong recovery. However, achieving it is very challenging. The 2026 context shows Vietnam still faces many macroeconomic risks: export growth is likely to slow due to the U.S. 20% reciprocal tariffs; domestic demand is recovering but not strong enough to offset pressures; and inflation and exchange rate pressures are rising again.

While the U.S. Federal Reserve’s rate cuts will help stabilize external conditions, domestic monetary policy must be more cautious. Credit growth in 2025 rose sharply by over 19%, requiring tighter regulation in 2026 to avoid inflation risks and exchange rate pressures. Overall, Vietnam’s economy is expected to maintain growth momentum in 2026, but this must be paired with macroeconomic stability rather than pursuing speed at any cost.

How do U.S. tariffs affect Vietnam’s trade and production orientation?

The 20% U.S. reciprocal tariff on Vietnamese goods is a key bottleneck for export prospects in 2026. If exports to the U.S. fall by around 8%, overall Vietnamese export growth could drop to 5.3%. The most affected sectors include furniture, textiles, footwear, and seafood.

By contrast, the electronics sector, particularly products from FDI enterprises, continues to benefit from zero tariffs on many items, temporarily maintaining an advantage. However, the risk of the U.S. adjusting rules of origin or launching national security investigations under Section 232 could trigger deeper production shifts, forcing Vietnamese companies to participate in supply chains at higher standards. Agricultural products not produced in the U.S. are more likely to face lower tariffs.

In the long term, Vietnam should view the new tariffs not only as a challenge but also as a catalyst to restructure supply chains and increase domestic content ratios.

Where will FDI likely flow under this new context, and what does it mean for supporting industries?

FDI flows are changing significantly. Chinese FDI is currently the fastest-growing source, mainly targeting electronics, plastics, metals, machinery, and textiles. Many projects are small and medium in scale but spread across sectors that directly generate demand for supporting industries. If FDI registered in the processing and manufacturing sector from Singapore is actually Chinese investment, then China has become the largest FDI source for Vietnam over the past two years.

FDI from Japan, South Korea, and Taiwan is showing signs of slowing as investors face uncertainties regarding U.S. reciprocal tariffs.

FDI in manufacturing accounted for 68% of total newly registered capital in 2024, indicating that supporting industries will continue to be a focal point for investment and competition among countries in the region.

How will these macro factors reshape Vietnam’s supporting industries in 2026 and beyond?

The new tariff environment will force supporting industry companies to restructure toward higher domestic content to comply with strict U.S. and EU rules of origin in the near future. This trend is already evident in the registered FDI by sector. Electronics continues to account for the largest share, but FDI has also increased significantly in metal machinery, chemicals, and plastic products, all of which are supporting industries for electronics.

FDI continues to grow in both final assembly and component manufacturing with high value-added potential, providing opportunities for Vietnamese companies to participate more deeply in value chains, not only as tier-1 suppliers but also at tier-2 and tier-3 levels. The fact that many FDI projects from Asia, especially China, are not only focused on supporting industries but also include small and medium projects (US$1-3 million per project) shows that Vietnamese small and medium enterprises can compete in producing supporting industry products without being overly concerned about disadvantages in scale.

Thank you very much!

By Vietnam Business Forum