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Headlines:
Last-Minute Deal Cuts Tariffs, Unlocks Access
Economy Soars Past Global Slowdown
Nuclear Power Push Faces Reality Check
Tech Sector Bets Big on AI
Bank Overhaul
Stock Market Eyes Global Status
Cities Plan Makeovers
Green Energy Push Takes Off
Manufacturing Powers On
Government Goes Digital
Farm Exports Reaching for $65 Billion
Trade Rules Still Hamper Efficiency
Dual Citizenship Opens Door for Talent
Laws Get Business-Friendly Update
Last-Minute Deal Cuts Tariffs, Unlocks Access
Just days before Trump’s July 9 deadline, the United States and Vietnam have reached a preliminary trade agreement setting new tariff structures and market access provisions. It will put a 20% tariff on Vietnamese products imported into the U.S. and a 40% tariff on goods transshipped through the country, specifically targeting Chinese products. In return, US products will enter Vietnam with zero tariffs, including on vehicles. The deal includes Vietnam's commitment to open markets for U.S. agricultural products, trade worth as much as almost $3 billion, as well as discussions on 50 new Boeing aircraft. Stocks of brands that use Vietnam factories jumped, and US indexes ticked up. Footwear and apparel groups fear that added costs could land on importers and shoppers as duties bite.
Read more: Reuters (policy), CNN (timeline), BBC (overview), WWD (footwear), CNBC (pricing), Politico (Trade Agreement)
Economy Soars Past Global Slowdown
Vietnam posted Q1 GDP growth of 6.93%. UOB says it sees 6% growth for FY25. International organizations including the WEF, IMF, and OECD have been singing the praises of the government’s economic management; the country remains on track to reach upper-middle-income status by 2026, and high-income status by 2045. The government dropped the VAT rate from 10% to 8% through 2026 - the reduction is expected to reduce state budget revenue by about $4.8 billion, but hopefully it keeps the consumer happy. About 60% of Vietnamese companies still have an optimistic growth outlook, even in the face of disruptive U.S. trade policies and global economic uncertainty.
Read more: The Investor (Economic Recovery), VN Economy (Income Status), East Asia Forum (Growth Targets), Vietnam Insiders (VAT Reduction), UOB (Business Outlook)
Nuclear Power Push Faces Reality Check
Nuclear power is on the table with two plants planned in Ninh Thuan province with 8,000 megawatts by 2030. The US$22 billion project involves Vietnam Electricity (EVN) and PetroVietnam (PVN), with international partnerships being explored with Rosatom, EDF, Westinghouse, KEPCO, and Hitachi. Negotiations with Russia are ongoing to secure an investment agreement by August 2025, with operations targeted for late 2031. The National Assembly has approved an amended Law on Atomic Energy to create a regulatory framework aligned with IAEA standards. While on the surface this seems like exciting news, the program has some obstacles to overcome, including a shortage of nuclear specialists, an ambitious timeline, huge financial requirements, and underdeveloped regulations.
Read more: Eco-Business (Program Overview), NucNet (Russia Negotiations), VN Economy (Regulatory Framework)
Tech Sector Bets Big on AI
The government plans to spend 2% of GDP on R&D, with about 60% of that total coming from social funding. CT Group has built an IoT chip fully developed by Vietnamese engineers using CMOS and III/V semiconductor technologies. Major companies FPT, MobiFone, and Zalo have formed the Au Lac AI Alliance to work on building and improving Vietnamese large language models. The Ministry of Science and Technology launched a plan to lure 100 elite AI specialists.
Read more: VN Economy (Resolution 57), VIR (Policy Impact), Vietnam News (Chip Development), VnExpress (AI Talent), VnExpress (Technological Progress)
Bank Overhaul
A newly amended Credit Institution Law restores banks' authority to seize undisputed collateral, expedites debt recovery, and empowers the State Bank of Vietnam to provide 0% interest special loans to struggling banks. The government has begun a controlled pilot for digital banking, creating a legal environment for testing new fintech solutions. The State Bank has said that biometric authentication for all businesses using fingerprints or facial recognition with chip-based ID cards or passports is going to become mandatory, just as banks are phasing out magnetic stripe cards, replacing them with more secure EMV chip cards.
Read more: VIR (Regulatory Framework), Vietnam News (Debt Recovery Powers), Vietnam News (Security Enhancement), Vietnam News (Sandbox Initiative)
Stock Market Eyes Global Status
The VN-Index hit 1,371.44 points, its highest level since Q122. MSCI has reported progress, including allowing foreign institutional investors to trade without pre-funded accounts and securities firms providing payment guarantees. Omnibus Trading Accounts will be introduced in August 2025, and Central Counterparty operations by 2026. Deputy Prime Minister Ho Duc Phoc has told the Ministry of Finance to continue working on upgrading Vietnam's stock market status from frontier to emerging market by October - the upgrade could bring as much as $800 million from passive index investors, $2 billion from benchmark trackers, and $4-6 billion from active funds.
Read more: The Investor (Upgrade Initiative), Vietnam News (MSCI Assessment), Asian News Network (Market Performance), The Investor (Outlook)
Cities Plan Makeovers
Ho Chi Minh City has released its master plan through 2040, with six development zones with distinct economic functions planned. The Central Urban Zone, for example, will be the administrative core, and Thu Duc City is expected to become an innovation hub with an International Financial Center. A master plan to transform the Red River Delta into a modern, eco-friendly region has been approved, shooting for annual growth of 9.0-9.5% and per capita GRDP of $11,000-12,000 by 2030. The recent merger of provinces and cities is creating opportunities for industrial property development by allowing for larger-scale planning and improved regional competitiveness. The Prime Minister has approved two urban projects in Khánh Hòa Province's Vân Phong Economic Zone, totaling $2.5 billion in investment and housing over 103,000 residents.
Read more: VN Economy (HCMC Zones), Việt Nam Economic News (Red River Delta), Vietnam News (Provincial Mergers), Vietnam News (Van Phong Zone)
Green Energy Push Takes Off
The Ministry of Industry and Trade has set regional ceiling tariffs for offshore wind power, ranging from VND 3,078.9 to VND 3,975.1 per kWh. The country will introduce its first offshore wind project by the end of this year, with plans to develop 6,000 MW of capacity over the next half-decade. The Battery Energy Storage Systems (BESS) sector is picking up speed with the Power Development Plan VIII targeting 300MW of battery storage by 2030. The Ministry of Agriculture and Environment says it will work to establish 2.5 million hectares of low-emission cultivation by 2030, targeting a 30% cut in methane emissions.
Read more: Reccessary (Wind Tariffs), VIR (Battery Storage), VN Economy (Low-Emission Farming), VIR (Japan Partnership)
Manufacturing Powers On
The Industrial Production Index rose 8.8% year-over-year in Q2. The processing and manufacturing sector was the growth leader at 10.8%, with export-first industrial goods making up 85% of total turnover. Standout subsector growth was found in motor vehicle manufacturing (34.3%), leather products (16.8%), and garment production (15.7%). VinFast has built a new 360,000 square meter electric vehicle factory with an annual production capacity of 200,000 vehicles, and expects to be able to ramp that up to an astonishing million vehicles each year. On the current sales side, Hyundai Motor Group is the current market leader with one in every 5 cars sold wearing their badge: 101,738 units.
Read more: Vietnam News (Sector Growth), VN Economy (Bac Ninh FDI), The Machine Maker (VinFast Factory), Business Korea (Hyundai Performance)
Government Goes Digital
The National Public Service Portal became the country's single digital gateway starting June 27. Provinces were required to publish their complete administrative procedure lists by then and make sure that all public services were available online by July 1. The Ministry of Finance proposed a state-led cross-border e-commerce payment gateway to improve financial tracking and tax management of digital trade.
Read more: VN Economy (Digital Gateway), Vietnam Economic Times (Administrative Reform), The Investor (Data Fund), Vietnam News (Payment Gateway)
Farm Exports Reaching for $65 Billion
The agricultural sector has posted healthy H1 2025 export numbers, reaching $33.5 billion (up 14.3%) toward its annual $65 billion target. Coffee exports hit a record $5.5 billion in the first half of 2025, doubling last year’s figures. The Ministry projects full-year coffee exports to increase 37% to $7.5 billion. An optimistic target of $3.3 billion has been set for rubber exports this year, with a focus on expanding sales into the European Union, but that number will be tough to hit..
Read more: Vietnam News (Export Performance), VnExpress (Coffee Exports), VnExpress (Durian Price), Viet Nam Economic News (Coconut Imports), Vietnam News (Rubber Exports)
Trade Rules Still Hamper Efficiency
Regional trade is being retarded because of non-tariff barriers (NTBs) across ASEAN. Vietnam's logistics costs are stubbornly high at 18% of GDP compared to a global average of 10.6%, mostly due to complicated inspection and documentation requirements. The wood industry is saddled with different ASEAN standards for adhesives and emissions. Seafood exporters have complex labeling requirements, strict SPS measures, TBT requirements, Halal certification requirements, and varying standards across ASEAN nations. While intra-ASEAN tariffs have dropped below 1%, non-tariff barriers (NTBs) continue to impede regional trade. Harmonizing these differences is a big opportunity to findefficiencies and reduce costs.
Read more: VIR (Trade Barriers), VIR (Seafood Exports), VIR (Expansion Obstacles), VN Economy (Regional Integration)
Dual Citizenship Opens Door for Talent
Vietnam has made major changes to its nationality law, now allowing dual citizenship for both Vietnamese citizens abroad and for foreigners. The law gets rid of previous requirements to renounce foreign citizenship and removes language proficiency and residency prerequisites, specifically targeting skilled workers in technology (AI and semiconductor) sectors. About 6 million Vietnamese currently live overseas.
Read more: The Straits Times (Policy Change), Asian News Network (Strategic Focus), VN Economy (Process Simplification), VnExpress (Digital IDs)
Laws Get Business-Friendly Update
The National Assembly passed amendments to eight laws to improve public investment efficiency and governance flexibility. The reforms modify the Public Procurement Law, PPP Law, Customs Law, Value-Added Tax Law, Export/Import Duties Law, Investment Law, Public Investment Law, and Public Assets Management Law. The main changes include granting state-owned enterprises greater autonomy over the way they do procurement, better revenue-sharing in PPP projects, and the delegation of investment approval authority to provincial committees.
Read more: VIR (Law Amendments), VN Economy (Investment Disbursement), Vietnam News (Fee Reductions)
That’s it for this week!
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