The tariffs imposed by the Trump administration have sent shockwaves across the globe, but it is in Southeast Asia—particularly in Vietnam and Cambodia—that their impact is being felt most acutely. As soon as the measures were announced, Vietnam responded swiftly by sending a delegation to the United States in an attempt to ease tensions. Thanks to these negotiations, Hanoi managed to reduce tariffs from 46% to 20%, while accepting a 0% rate on U.S. imports into Vietnam. This tariff asymmetry has sparked mixed reactions: some were outraged, seeing it as unfair, while others shrugged it off, arguing that Vietnam imports very little from the United States—only $7.3 billion in five months (2025), a 21% increase. In contrast, Vietnamese exports to the United States are projected to reach $130 billion in 2025, deepening a trade imbalance that, while not unexpected, reflects the developmental gaps and the nature of trade between the two countries.
This imbalance is explained by Vietnam’s specialization in industrial production—textiles, electronics, footwear, and agriculture—while the United States exports more services, advanced technologies, and agricultural products. Vietnam’s strategy, focused on attracting foreign investment and boosting exports, appears to be paying off despite persistent trade tensions. Vietnamese workers, known for their intelligence, discipline, and strong work ethic, are often preferred over Thai or Cambodian workers by major international corporations. Samsung employs between 100,000 and 170,000 people in Vietnam, Intel around 10,000 (directly and indirectly), and Microsoft had 221,000 employees there in 2022.
Who Will Pay for These Tariffs?
The central question remains: who will bear the brunt of these new taxes? A significant portion will likely be passed on to American consumers and importers, but Vietnam, with its tariffs reduced to 20%, is faring better than others. Cambodia, meanwhile, managed to lower its tariffs from 49% to 19%—a relative relief, but still insufficient to ease the concerns of local industries. Some investors are even considering relocating their operations from Cambodia to Vietnam, attracted by the quality of the workforce, infrastructure, and political stability in Vietnam. China, taxed at up to 40%, cannot compete with Vietnam on price, but a thorny question remains: what about transshipments of Chinese products through Vietnam? Many Vietnamese products contain Chinese components—will they be taxed at 20% or 40%?
On the Vietnamese import side, only 3.6% come from the United States, while 25% of Vietnamese exports are destined for the American market. The situation is even more unbalanced for Cambodia: the country imports less than 3% of its goods from the U.S., but 70% of its exports—primarily garments—go to the United States. The textile sector, which accounts for 60% of Cambodian exports and generates 700,000 jobs (mostly held by women), has pulled the country out of extreme poverty, with growth rates of 6% per year. These manufacturing exports are now threatened by the new tariffs.
The Impact on Populations: A Daily Struggle
The consequences of these measures are already being felt on the ground. Huyên, our partner from Thiên Chí in Bình Thuận, has observed the effects of U.S. tariffs on the daily lives of Vietnamese people over the past few months:
- Inflation has risen, with product prices increasing, reducing purchasing power and leading households to spend less. The rapid depreciation of the dong against the dollar is making the internal situation worse. But on the other help it helps Vietnamese exports.
- In industrial zones, many businesses, particularly in the steel sector, are going bankrupt or laying off workers en masse. High U.S. tariffs on steel have made exports impossible, pushing thousands of workers into unemployment.
- Companies are relocating their operations to less-taxed countries like Indonesia or Thailand, where tariffs do not exceed 19%.
- Small businesses are suffering from the decline in purchasing power, and microloan borrowers from Thiên Chí—often small shop owners—are seeing their incomes drop.
In Cambodia, the situation is equally concerning. Mith, our partner from CAO in Svay Riêng, reports that private lenders continue to charge exorbitant interest rates: 10–20% per month. Worse, some moneylenders have shifted from monthly repayments to daily ones, with rates reaching 25–30%. For example, a borrower requesting $100 might only receive $70–75, but must repay $3.34 per day for a month—a practice that further impoverishes the most vulnerable populations.
The Most Affected Sectors and Their Social Repercussions
In Vietnam, the sectors most dependent on exports—textiles, footwear, electronics, and agriculture—are the hardest hit. The International Trade Centre (ITC) warns of “tens of thousands of jobs at risk.” A June 2025 PwC survey revealed that 86% of Vietnamese companies, particularly in manufacturing, fear a negative impact on their operations.
- In northern industrial zones (Hai Phong, Bac Ninh), local studies report a rise in depression and anxiety among workers due to fears of layoffs or relocations.
- Alcoholism and domestic violence: Economic stress is pushing some unemployed or underemployed men toward alcohol, exacerbating family tensions and domestic abuse. Microcredit programs by Mekong Plus, active in a thousand villages, target the poorest, who survive on less than one euro per day. Half of these households are led by single mothers, abandoned by alcoholic or absent husbands.
- Widespread insecurity: In industrial areas (Hanoi, Ho Chi Minh City, Bac Ninh, Dong Nai), farmers exporting to the U.S. (cashews, seafood, coffee) are seeing their margins shrink, sometimes forcing them to sell at a loss.
- Debt and depression: Many have taken out loans to invest in their businesses. With falling revenues, repayment has become impossible, leading to depression and suicidal thoughts—a phenomenon already documented during past crises.
A striking example: In the Mekong Delta, fishermen and rice farmers are protesting the tariffs, which they see as a threat to their survival, while high-tech factories continue to thrive.
Similarities to Past Crises
This situation echoes the 1997 Asian financial crisis, when the devaluation of the dong and mass layoffs triggered a wave of depression and suicides, particularly among indebted men. Lessons from that period—such as the development of microcredit programs—could be reactivated today. It also recalls the aftermath of the COVID-19 crisis, whose effects are still being felt in rural areas. Farmers, already impoverished, had to sell off assets, while moneylenders doubled their interest rates after the tariffs were announced. “Are we going to relive this? Is it happening again?” many wonder, fearing a return to the worst moments of the pandemic.
Rare Earths: An Opportunity, but at What Cost?
Facing these challenges, Vietnam is banking on a strategic asset: its rare earth reserves, estimated to be perhaps three times those of the United States, but ten times less than China’s. These minerals, essential for green technologies and high-tech industries, could position Vietnam as a key player in the global energy transition. Hanoi has adopted a new Mineral Geology Law (2024), aimed at centralizing resource regulation and promoting sustainable extraction. International partnerships (with the U.S., Australia, and South Korea) have been signed to develop a responsible supply chain with strict environmental standards.
However, this opportunity comes with major risks:
- Pollution and forced displacement of populations, particularly among ethnic minorities in the North (Hmong, Tay).
- Social conflicts: In 2022, protests against mining projects in central Vietnam were violently suppressed, leaving lasting trauma.
- In Lai Châu Province, villages near rare earth mines report birth defects and unexplained illnesses, fueling distrust and anger.
In China, where the state tightly controls information, populations near mining areas suffer similar issues, but expressions of discontent are quickly suppressed. In Vietnam, however, civil society is more active, though still under surveillance.
Glimmers of Hope
The Vietnamese government is not standing idle. Since the U.S. embargo was lifted in 1994, Vietnam has pursued a balancing act in its international relations, navigating between China (with whom border tensions persist), Russia, and the United States. Military cooperation between Hanoi and Washington, strengthened since 2011, now includes areas such as maritime security, peacekeeping operations, and defense trade. These ties, formalized by a 2022 Memorandum of Understanding and a 2024 Joint Vision Statement on Defense Relations, reflect a desire for stability in a rapidly changing region.
Vietnam is developing at a breakneck pace, but this growth comes with strong environmental tensions. Protests against mining or industrial projects are often suppressed, and the development of rare earth mining will be a perilous test for the government. Yet, this crisis could also represent a tremendous opportunity: by becoming a credible player in battery and green technology production, Vietnam could diversify its economy and reduce its dependence on traditional exports.
Some Young Vietnamese graduates, educated and connected, see this ecological and technological transition as a chance to engage in sustainable projects—renewable energy, recycling, and “green” startups. Community solidarity, local entrepreneurs’ ingenuity, and NGO support offer pathways to mitigate the crisis’s effects. A comprehensive response, combining psychological support, economic measures, and transparency, will be essential to safeguard the mental health and well-being of the Vietnamese people.
Conclusion: Between Challenges and Opportunities
Trump’s tariffs have exacerbated trade imbalances and weakened the Vietnamese and Cambodian economies, which are heavily dependent on exports to the United States. However, these crises could accelerate a necessary transition: market diversification, technological innovation, and responsible resource exploitation. For Vietnam, the key lies in its ability to balance economic growth, now expected to be lower: 5% compared to 6-7%, social justice, and environmental sustainability—a daunting challenge, but perhaps a historic opportunity to rethink its development model.
For Cambodia, the priority is to reform its economy to reduce its dependence on textiles and improve the living conditions of its workers, particularly the women who form the backbone of its manufacturing sector. Despite the turmoil, both countries have assets to bounce back—provided they seize the opportunities while protecting the most vulnerable from the social consequences of these economic upheavals.
