Ho Chi Minh City remains committed to achieving an 8.5% growth rate amid tariff complexities
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HCM City, the bustling economic powerhouse of Vietnam, is neck-deep in battle, aiming for a 8.5% economic growth by 2025 amid the roaring chaos wrought by the US reciprocal tariff.
According to the city's Department of Industry and Trade, the US has been a lucrative market for local businesses, accounting for the second-highest share of exports. In 2024, HCM City exported a whopping $7.4 billion to the US, a staggering 24.3% growth year-on-year.
The city's exports cover a wide array of products, including computers, electronics, components, textiles, garments, machinery, and footwear. It also serves as a hub for agricultural goods, exporting peppers, cashews, vegetables, seafood, and more.
The sudden announcement of US tariffs has sent shockwaves through the local business community. Nguyễn Văn Khánh, deputy chairman of HCM City Leather and Footwear Association, shares that many businesses saw their orders delayed or forced to cover half of the tariff cost.
The 90-day reprieve in the implementation of the new tariffs has provided some relief for local businesses, allowing them to catch up on orders and reassess their production strategies.
For the textile and garment industry, this period is crucial. Phạm Văn Việt, management board chairman of VitaJean Co Ltd and deputy chairman of the HCM City Association of Garments, Textiles, Embroidery, and Knitting, considers the extension a golden opportunity to speed up production in the first half of the year. They will also adjust their production plans based on upcoming negotiations between Vietnam and the US.
The agricultural goods exporters of HCM City are also speeding up their deliveries, taking full advantage of this 90-day window. Phan Minh Thông, board chairman of Phúc Sinh pepper and coffee export group, further confirms that the US remains a significant importer of Vietnamese pepper, with the pepper industry retaining optimism for reduced tariffs on non-competitive agricultural products.
HCM City will continue to strive for a 8.5 per cent economic growth rate by the end of 2025 amid challenges brought on by the US reciprocal tariff. VNA/VNS Photo
The city needs to take advantage of this negotiation period to prevent disruptions, especially for seasonal products like textiles, garments, and agricultural goods, asserts Pham Bình An, deputy rector of HCM City Institute for Development Studies.
Redoubling Efforts to Achieve Economic Goals
Nguyễn Văn Được, chairman of HCM City People's Committee (Administration), highlights that HCM City plays a pivotal role in Vietnam's economic growth, being an export and commercial hub in the Southern region. In response to the tariff challenge, the city has been working closely with businesses and experts to evaluate the situation and draft appropriate responses.
The city is also reinforcing its public investment in traffic and logistics, stimulating demand, and offering favourable loan programs to help businesses resolve production problems. To adjust to the current circumstances, HCM City will restructure its trade facilitation programs to focus on promising markets.
Beyond Tariffs: Sustainable Growth Strategies
While the negotiation process is vital, Professor Nguyễn Trọng Hoài from HCM City University of Economics argues that there are other paths to sustainable growth. Businesses should strive for market diversification, speed up the disbursement of public traffic infrastructure and logistics projects to reduce costs, and tap into unexplored markets like the Middle East and Africa.
Nguyễn Minh Hà, rector of HCM City Open University, advises that the city could help businesses find new partners by connecting them with foreign trade networks, providing them with information, and organizing trade facilitation programs.
Phạm Bình An emphasizes the importance of tightening rules of origin regulations to reduce dependence on imported machinery and materials, thereby promoting domestic production.
A garment workshop in HCM City. Many local businesses have been taking advantage of the 90-day pause in new tariffs to speed up production. VNA/VNS Photo
The 46% reciprocal tariff, announced by US President Trump on April 2, 2025, is turning up the heat on the economic landscape. The moves and strategies adopted by HCM City will play a crucial role in determining its future growth trajectory.
- The government of HCM City aims to achieve an 8.5% economic growth by 2025, despite the turmoil caused by the US reciprocal tariffs.
- The US is a significant market for HCM City's exports, accounting for the second-highest share in 2024, with $7.4 billion worth of exports.
- The sudden announcement of US tariffs has impacted local businesses, forcing some to cover half of the tariff cost and delaying orders.
- The 90-day reprieve in the implementation of new tariffs is being utilized by businesses to catch up on orders and reassess production strategies.
- For the textile and garment industry, this period is critical for speeding up production in the first half of the year and adjusting production plans based on upcoming negotiations.
- Agricultural goods exporters, such as Phúc Sinh pepper and coffee export group, are also expediting deliveries to take full advantage of the 90-day window.
- HCM City's government is taking steps to prevent disruptions, reinforcing public investment in traffic and logistics, and offering favorable loan programs for businesses. Additionally, efforts are being made to diversify markets beyond the US and explore new partnerships in the Middle East and Africa.
