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Home » How Trump’s New Tariff Could Affect the Samsung–Vietnam Partnership (Big Time)

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How Trump’s New Tariff Could Affect the Samsung–Vietnam Partnership (Big Time)

April 12, 2025
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How Trump’s New Tariff Could Affect the Samsung–Vietnam Partnership (Big Time)
VIETNAM-SAMSUNG
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In July, Samsung Electronics Chairman Jay Y. Lee conveyed a clear message to Vietnamese Prime Minister Pham Minh Chinh:

Vietnam’s development is intertwined with ours. When Vietnam succeeds, Samsung succeeds.

He vowed to commit long-term resources so the country could become Samsung’s primary base for display manufacturing.

Samsung’s decision to enter Vietnam in 1989 laid the groundwork for establishing global production centers beyond China.

Many other businesses later followed this example—especially after the U.S. government under President Donald Trump imposed tariffs on Chinese imports.

Thanks to that early expansion, Samsung now ranks as Vietnam’s leading foreign investor and exporter.

Research indicates that around 60% of the 220 million phones Samsung ships worldwide each year come from Vietnamese facilities.

Many are shipped to the United States where Samsung holds the position of second-largest smartphone vendor.

But this reliance on Vietnam has become a potential liability. A hefty 46% tariff on products coming from the Southeast Asian nation—still under discussion in Washington—puts Samsung’s operations at risk.

Although the U.S. administration recently instituted a 90-day pause at 10%, there is concern that if tariffs climb in July, Samsung would face a serious setback.

Samsung officials, speaking on condition of anonymity, described a sense of urgency and confusion inside the company.

Despite Vietnam’s push to reduce the potential tariff to somewhere between 22% and 28%, the country’s substantial trade surplus with the United States makes it a target in the Trump administration’s clampdown on imbalanced trade relationships.

Insiders note that Samsung may readjust production if higher tariffs take hold—possibly ramping up manufacturing in India or South Korea. However, such shifts would be both expensive and time-consuming.

Company representatives have declined to comment publicly beyond stating that they will adapt to any new duties by leveraging their global supply chain.

On the other hand, Apple is also facing similar pressures but with even higher proposed tariff rates on Chinese imports—reports indicate a 145% levy.

Since approximately 80% of the iPhones sold in the U.S. are assembled in China, Apple stands to see even greater short-term complications.

This shift in trade is only one of many challenges for foreign firms in Vietnam. The country’s rapid manufacturing expansion has strained power grids and driven up labor costs.

To align with new OECD recommendations, Vietnam has raised effective tax rates on large multinationals, leaving some businesses frustrated at the reduced incentives.

Economists warn that if these pressures intensify, Vietnam’s appeal as a cost-effective manufacturing hub may diminish, opening the door for other nations like India to attract more investment.

India has fast-tracked discussions toward a trade accord with the U.S., aiming to finalize a first-phase deal later this year.

Vietnam, for its part, has pledged to buy more goods from the U.S. and began trade negotiations promptly once tariffs were put on pause. Yet uncertainty lingers for foreign investors.

According to Ko Tae-yeon, who chairs the Korea Chamber of Business in Vietnam, some companies initially considered workforce reductions after the higher duties were announced.

Now, many are watching and waiting to see what happens next.

While Samsung has yet to finalize a detailed plan, several sources say the company might switch production of certain U.S.-bound phone models to its facilities in Gumi, South Korea.

Another possibility involves expanding manufacturing in India, although that would require significant upgrades to local supply chains.

In 2024, Samsung’s exports from Vietnam reached approximately $54 billion, equivalent to about 15% of the country’s total exports.

According to a Samsung worker in Thai Nguyen, the news about the new tariff have left employees deeply concerned. “I’m worried they might shift everything elsewhere,” he noted, reflecting the mounting anxiety across production lines.

Analysts at BMI Research estimate that electronics make up roughly 45% of Vietnam’s exports to the United States—so a slowdown in demand or extra duties would directly threaten these shipments.

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