Vietnam’s Prime Minister Phạm Minh Chính has sounded the alarm on the looming threat of a global trade war, urging government bodies and leaders to brace for disruptions to the nation’s export-driven economy. Speaking at a regular government meeting in Hanoi on Wednesday, the Prime Minister highlighted the unpredictable nature of international affairs and the potential for a trade conflict to fracture global supply chains, narrowing markets for Vietnamese goods. “We need to consider potential scenarios and prepare solutions to respond to them swiftly and effectively,” Phạm Minh Chính declared. “We must absolutely avoid being passive, caught off guard, or missing good opportunities and momentum for growth.” His remarks come at a critical juncture for Vietnam, a country heavily reliant on exports of electronics, textiles, and footwear to major markets like the United States, China, and the European Union.

A Call for Proactive Measures

The Prime Minister’s warning reflects growing concerns over escalating trade tensions globally, particularly between economic powerhouses like the US and China, which could ripple across smaller, export-dependent economies like Vietnam. A trade war—potentially involving tariffs, sanctions, or supply chain blockades—could severely impact Vietnam’s economic stability, which has seen robust growth in recent years due to its strategic position in global manufacturing.

To counter these risks, Phạm Minh Chính proposed a multi-pronged strategy. He called for reinforcing traditional growth drivers, such as manufacturing and agriculture, while promoting emerging sectors like technology and renewable energy. He also urged the diversification of export markets, pointing to untapped potential in regions like the Middle East and South America. Expanding into these areas could help Vietnam reduce its dependence on traditional partners and mitigate the fallout from any global trade disruptions.

The Prime Minister set an ambitious target of 8 per cent GDP growth for 2025, challenging each ministry, sector, and locality to establish and meet their own growth objectives. This goal, while aspirational, underscores the government’s determination to maintain economic momentum amid external uncertainties. However, achieving such growth will require not only strategic planning but also significant investment in infrastructure and policy reforms.

Infrastructure as a Growth Engine

A key pillar of the government’s economic strategy is a massive push for infrastructure development. During the meeting, Phạm Minh Chính outlined several flagship projects aimed at bolstering connectivity and industrial capacity. Among them is the construction of at least 3,000 kilometres of expressways within the year, a move intended to improve logistics and reduce transportation costs for exporters.

Additionally, the Prime Minister directed the Ministry of Transport to advance plans for the Lào Cai – Hà Nội – Hải Phòng railway, a critical link connecting Vietnam to China, one of its largest trading partners. The project, if completed, could enhance cross-border trade and strengthen Vietnam’s position as a regional logistics hub. He also addressed ongoing challenges with build-transfer-operate (BOT) road projects, calling for swift resolution to ensure they do not hinder economic progress.

In the aviation sector, the government is fast-tracking major developments. Terminal 3 at Tân Sơn Nhất Airport in Ho Chi Minh City is slated for completion by 30 April 2025, while the first phase of the Long Thành International Airport project, also in southern Vietnam, is expected to be finished by the end of the year. These projects are poised to boost tourism and business travel, further supporting economic growth.

Beyond transport, energy infrastructure remains a priority. The Prime Minister tasked the Ministry of Industry and Trade with preparing a proposal for the development of the Ninh Thuận nuclear power plant, to be presented at an extraordinary meeting of the National Assembly later this month. While nuclear energy could provide a sustainable solution to Vietnam’s growing power demands, the project is likely to face scrutiny over safety and environmental concerns, issues that have historically stalled similar initiatives in the country.

On the social front, Phạm Minh Chính called for accelerated efforts to construct social housing and eliminate temporary and dilapidated homes by the end of 2025. This initiative aligns with the government’s broader goal of improving living standards and reducing inequality, particularly in rural and underserved areas. Such measures are critical for maintaining social stability, especially as economic pressures from global uncertainties mount.

Political Preparations Amid Economic Goals

The Prime Minister also touched on political priorities, directing ministries and agencies to implement the Party Central Committee’s Resolution 18 on streamlining the administrative apparatus. This reform aims to enhance governance efficiency, a crucial factor in ensuring that economic policies are executed effectively. He emphasised that the process must proceed without disruption, signaling the government’s commitment to internal restructuring even as it tackles external challenges.

In preparation for the 14th National Party Congress, Phạm Minh Chính urged the organisation of party congresses at all levels. These gatherings will play a pivotal role in shaping Vietnam’s political and economic direction for the coming years, including the selection of leadership and the formulation of long-term policies.

Challenges and Speculative Risks

While the government’s proactive stance is commendable, the road ahead is fraught with challenges. A global trade war, if it materialises, could disrupt Vietnam’s export markets far beyond what current contingency plans might address. For instance, if major economies impose punitive tariffs or restrict supply chains, Vietnam’s manufacturing sector—already grappling with rising costs and labour shortages—could face significant setbacks. While the Prime Minister’s call for market diversification is a step in the right direction, establishing a foothold in regions like the Middle East and South America will require time, investment, and diplomatic efforts, none of which guarantee immediate results.

Moreover, the ambitious GDP growth target of 8 per cent may prove difficult to achieve if external conditions worsen. Analysts suggest that while infrastructure projects and domestic reforms could bolster growth, unconfirmed estimates indicate that a global downturn could shave off several percentage points from Vietnam’s GDP trajectory. As such, the government’s optimism must be tempered with realistic contingency planning, ensuring that resources are allocated efficiently to weather potential economic storms.

On the infrastructure front, while projects like the Lào Cai – Hà Nội – Hải Phòng railway hold promise, they are not without risks. Delays, cost overruns, and geopolitical tensions with neighbouring China could complicate implementation. Similarly, the Ninh Thuận nuclear power plant proposal, though forward-thinking, may encounter public and legislative resistance due to unresolved safety concerns. These speculative challenges, while not yet confirmed, underscore the need for transparent dialogue and robust risk assessment.

A Balancing Act for Vietnam

Vietnam stands at a crossroads, balancing the imperatives of economic growth with the uncertainties of a volatile global landscape. Prime Minister Phạm Minh Chính’s address reflects a clear recognition of the stakes involved, as well as a determination to position Vietnam as a resilient player on the world stage. By diversifying markets, investing in infrastructure, and streamlining governance, the government aims to safeguard its economic future against the spectre of a trade war.

However, success will depend on the ability to adapt swiftly to changing circumstances and to translate ambitious plans into tangible outcomes. For now, the Prime Minister’s call to avoid being “passive” or “caught off guard” serves as a rallying cry for a nation determined to chart its own course amid global turbulence. As Vietnam prepares for the challenges ahead, the eyes of the international community will be watching to see whether it can turn potential risks into opportunities for sustained growth and development.